About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

AML Fines Increase by 160%, Finds Fenergo

Subscribe to our newsletter

Between October 2018 and December 2019, regulators across the US, Europe, APAC and the Middle East have levied over $10 billion in financial penalties against financial institutions for AML/KYC and sanctions-related violations and a further $82.7 million for data privacy and MiFID violations, according to Fenergo’s latest analysis of global regulatory fines for AML, KYC, sanctions, MiFID, and data privacy violations against financial institutions.

In total, global financial firms have paid out over $36 billion in fines for AML, KYC and sanctions violations since the financial crisis of 2008. Notably, 2019 was the second-biggest year in history for fines with $8.4 billion levied against global financial institutions – and fines related to AML, KYC and sanctions violations were up by 160% from 2018.

“Across the world, regulators are stepping up activity to address money laundering and terrorist financing and the ineffective policies and procedures in place to address these risks,” finds the report. “As a catalyst, fine values appear to be increasing to the point where they are making punitive inroads into the profit margins of financial institutions. The largest fine issued in 2019 at $5.1 billion exceeded the offending bank’s annual net profit. In previous years, questions were raised about the effectiveness of financial penalties and, in the case of one UK-headquartered bank, a fine for AML breaches amounted to just eight days’ profit.”

The data underlines the need for financial institutions to harness technology to improve processes and controls for AML and KYC compliance, including the ability to understand complex entity ownership structures, conduct robust risk assessments and identify relationships with high risk clients.

“When you consider all the other challenges financial institutions are faced with today – including digital disruption and the battle to win on customer experience – the sector has reached a crossroads,” says Laura Glynn, Director of Regulatory Compliance at Fenergo.

“Never has it been more important to embrace new technologies that automate and streamline the compliance process. In this way, financial institutions can future-proof their organizations against upcoming and evolving regulation, enabling them to focus resources on revenue generating tasks, while creating truly differentiated customer experiences.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Detecting and preventing market abuse

Market abuse – unlawful disclosure of inside information, insider trading, circular trading, “pump and dump” schemes, etc. – poses significant threats to the integrity of capital markets. In 2024, global trading house Trafigura agreed to pay a $55 million fine to the U.S. Commodity Futures Trading Commission (CFTC) for trading with non-public information, manipulating a...

BLOG

Addressing Financial Crime and AML with RegTech: Insights from the RegTech Summit 2024

Since the Bank Secrecy Act (BSA) was enacted 54 years ago to prevent and detect money laundering and terrorist financing, the compliance obligation has evolved from a basic reporting requirement into a highly complex and continually evolving anti-money laundering (AML) regime. An expert panel at A-Team Group’s RegTech Summit (NYC) in November convened to evaluate...

EVENT

TradingTech Summit London

Now in its 14th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

GDPR Handbook

The May 25, 2018 compliance deadline of General Data Protection Regulation (GDPR) is approaching fast, requiring financial institutions to understand what personal data they hold, why they process it, and whether it is shared with other organisations. In line with individuals’ rights under the regulation, they must also provide access to individuals’ personal data and...