Prompt Title: THING

Based on the provided artefacts and the assignment document, here is a more detailed outline for the essay, incorporating specific issues and considerations from the artefacts:

Introduction

• Introduce the purpose of the essay: to discuss the urgent remediation programme required at ICN Challenger Bank as directed by the FCA Enforcement Division.
• Mention the four key issues identified by the FCA that need to be addressed.

Section 1: Review of the Three Lines of Defense (3LOD) Model

Short-term Actions

• Analyze the current 3LOD model to identify gaps and inefficiencies.
• Address the rapid turnover of MLROs and the lack of a formal client due diligence function, as highlighted by the previous MLRO’s abrupt departure and concerns raised by staff.

Medium-term Actions

• Develop and begin implementing a new 3LOD model.
• Allocate budget for the recruitment of experienced compliance personnel.

Long-term Actions

• Establish ongoing training and development to maintain the effectiveness of the 3LOD model.
• Integrate a formal client due diligence function into the bank’s operational model.

Section 2: Review of Risk Appetite Statement/Policy and Procedures

Short-term Actions

• Conduct an immediate review of the current Risk Appetite Statement and policies to ensure they align with FCA expectations.
• Address concerns from the anonymous staff member about the lack of adverse media screening and annual approval of the AML/CFT & Sanctions Policy by the board/senior management.

Medium-term Actions

• Revise and update policies and procedures to address deficiencies.
• Implement risk tolerance statements and ensure the collection of necessary customer information.

Long-term Actions

• Regular reviews and updates to policies to adapt to changes in the regulatory environment and the bank’s operational context.

Section 3: Additional Resources in the First and Second Lines of Defense (1LOD and 2LOD)

Short-term Actions

• Identify critical staffing shortages in the 1LOD and 2LOD.
• Begin immediate recruitment to fill vacancies, especially considering the previous Head of Audit's departure.

Medium-term Actions

• Integrate new staff into the bank’s culture and processes.
• Develop a training program for the compliance team to enhance their capabilities.

Long-term Actions

• Build a sustainable resourcing strategy to ensure the compliance function grows in line with the bank's needs.

Section 4: Eliminating Periodic Renewal/Screening Alert Backlogs

Short-term Actions

• Address the immediate backlog issue in periodic renewals and screening alerts.
• Implement necessary tools and allocate budget to improve screening processes, especially with the high-risk factors associated with the bank’s customer base.

Medium-term Actions

• Automate and improve the transaction monitoring system to address deficiencies and backlogs.
• Develop a calibrated screening list that is appropriate for the size and complexity of the bank’s operations.

Long-term Actions

• Maintain a consistent process to prevent future backlogs.
• Establish continuous monitoring to adapt to the evolving risk landscape.

Section 5: Use of Enforcement Cases

• Provide examples of enforcement cases to illustrate the cost of non-compliance and the urgency of addressing the identified issues.

Conclusion

• Summarize the proposed actions and their importance for ICN Challenger Bank’s compliance with FCA requirements.
• Emphasize the commitment to implementing these changes within the six-month timeframe set by the FCA.

References

• Include all artefacts, correspondence, and policies mentioned in the outline.

This outline is crafted to reflect the complexities and specific challenges highlighted in the supporting documents, ensuring that the essay addresses each of the FCA's concerns and the bank's internal issues as discovered in the artefacts.