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Do you have scruples?

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I got into a Scruples debate this week. You know Scruples? A feeling of doubt or hesitation with regard to the morality or propriety of a course of action. Well, that’s the dictionary definition. The real definition should be where you know something is wrong morally and ethically, and wonder what to do about it.

It relates to the moral compass, something that many claim bankers lost in the last twenty years. I guess, with ESG, it might be coming back.

Anyways, what was my Scruples dilemma?

It’s a long one. I have an ageing parent and they’ve been independent for the past many decades but, with failing health, moved in with a family member in the UK. They cannot move in with me, as I’m not in the UK, so I’m glad that my sibling can accommodate them. However, on a recent visit, I discovered that all of my parent’s jewellery had disappeared. This upset me a lot, as much of it is sentimental items, and soon realised it was my sibling who had taken it. So, here is the dilemma:

Do I tell my parent that the jewellery was taken by her carer, my sibling, or do I keep quiet?

It’s a hard question because, if I tell my parent, then there will be a big falling out with her carer and relationship with them so, in my view, I cannot say anything. I could tell my sibling that I know what they’ve done, but that would just cause another falling out, with arguments that would ensue. So, I’ve decided to keep quiet. Is that the right thing to do?

The reason I’m blogging about this here is that this is a microcosm of a much bigger question about the financial markets overall. What if you know that a client is stealing from the government, but cannot prove it? Should you report the client or keep quiet? Under general regulations and rules, governments require that any licensed financial institution must report suspicious activities and, in most instances, banks do report such activities. But then, on the other hand, does the government take any action?

Relating this to the Scruples dilemma, I know I should report my sibling for theft but, because I have no proof and it’s just suspicious, I choose to keep quiet. Is this what happens with AML and KYC? Banks report suspicious activities and governments choose to ignore them?

When I look at SARS – Suspicious Activity Reports – there’s a lot of reporting. In 2021-2022, according to the National Crime Agency (NCA), 901,255 SARs were received and processed - a 21% increase on the previous year – with £305.7 million denied to suspected criminals as a result of Defence Against Money Laundering (DAML) requests – a 120.6% increase on the £138.6M denied in 2020-21.

However, as Dow Jones reports millions of SARS are filed with government agencies but few are actually investigated and followed up.

So, let’s bring it back to my dilemma. I know there’s a criminal in the house, but who do I tell and what will they do? If I tell my parent, it will just cause trouble; if I tell my sibling, we just fall out with each other; if I tell no one, the activity continues without remorse or supervision but hey, it keeps the system calm.

Isn’t that what SARS is all about?

Not necessarily. For all the SARS reports filed, only a small number are investigated. This is because, according to the Dow Jones article, “criminal activity is only prosecuted as a result of careful evidence gathering after the event in question has occurred and only after a SAR has been filed”. Often, by then, it’s too late.

SAR Filing Trends


Source: FinCEN Created with Datawrapper


Talking of trust

Talking of trust, I just had a hugely lengthy almost hour-long conversation with some box ticker jerk at my bank. They wanted to know all the details about almost every transaction I had made in the last year, many of which rang no bells. “What are these three payments to Gemma Smythe?” “Did you make a contactless payment with Pigs Anus on 3rd September?” “Do you remember buying a bottle of champagne at Hanky-Spanky on 8th December?”

Of course, I couldn’t remember any of them but, the more the questioning went on, the more angry I got. What right does my bank have to ask these questions of me? Having been with the bank for a decade, why were they asking me to answer these questions now?

I asked the button-pusher and the only reply I got was: “this is an FCA (regulatory) inquiry and, if you don’t answer, we can freeze your account”. Very helpful.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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