It’s been really stormy in the UK over the last few weeks (well, compared to what we normally experience anyway).
Did anyone see the pictures of the Dawlish railway track left suspended over the sea after storm waves washed away the sea wall? This section of railway was built by Isambard Kingdom Brunel (1806 – 1859) and, winding its way prettily between the sea on one side and impressive looking seafront houses on the other, it had remained largely unchanged since that time.
Whilst I would normally tend to agree with the adage “if it aint broke, don’t fix it” – one phrase does spring to mind – RISK ASSESSMENT.
Although the recent storms have been declared as ‘unprecedented’, it seems we have been experiencing the ‘worst flooding since….’ and the ‘worst storms since….’ for a number of years now. And given its proximity to the sea surely someone should have considered what might happen in a worst case scenario – after all we are bombarded regularly with information suggesting we are going to experience more extremes of weather due to global warming.
So in the face of climate change care needs to be taken to protect things like our travel infrastructure - just because a section of railway has not suffered significant damage to date does not mean it will not in the future.
Where am I going with this you might ask – surely it is not just a rant about the trains….or the weather?
Straight down the line
If I bring this back to my favourite topic, financial crime, there are clear parallels to be drawn.
We might not be facing climate change in area of financial crime as such, but we are facing a climate of change. A change to ever more intrusive regulation and ever increasing onus on firms to prevent and detect financial crime; and a change in the modus operandi of criminals (organised or other) to continue to try and beat the system.
Rather like the increasing occurrence of fierce storms should have been a warning to the rail operators in the above example, regulated firms have been given notice that regulators will be taking a tougher stance.
Know your risks
It is therefore, important that firms (especially the 12% of firms which, according to the KPMG annual AML Survey, are suffering from a lack of interest by senior management) continue (or start?) to conduct risk assessments to look at the current picture - rather than relying on a snapshot taken years ago. And that they examine their proximity to risk (e.g. PEPs and high risk clients), invest in resource, training and technology and shore up any weak defences - before a visit from the regulator finds the gaps and leaves a firm hanging over a boiling sea of enforced changes, associated consultants’ fees and no guarantee that there won’t be a fine at the end of it.
In Dawlish, concrete will be sprayed onto the cliff to try to limit the short term damage. The fix for a firm isn’t quite so straightforward.