AML, sanctions & KYC non-compliance fines totals $26bn

Global financial institutions have been fined $26bn for non-compliance with Anti-Money Laundering (AML), Know Your Customer (KYC) and sanctions regulations in the last decade, according to new research.

The data released by Fenergo, a provider of Client Lifecycle Management solutions for financial institutions, is based on various sources, including regulatory and news outlets providing insight into fines by region, country, regulator and by types of fines imposed.
It highlights how regulators have approached breaches from foreign versus domestic financial institutions.

Fenergo data found that the US accounts for nearly 44% of all global regulatory AML/KYC fines, yet almost 91% of the total value ($23.5bn).

In Europe, there have been 83 fines totaling $1.7 billion, the majority of which being imposed by the UK‘s Financial Conduct Authority (FCA).

Asia Pacific regulators have levied 79 fines worth almost $609m, commencing in 2011, while the Middle East has recorded a total of $9.5m in the last 10 years.

Laura Glynn, Director of Global Regulatory Compliance, Fenergo, said, “Up until now, the focus of regulators had been on the US and European markets. However, we are now witnessing regulators in Asia Pacific and The Middle East markets becoming more proactive in their supervisory efforts.”

The US Department of Justice is the most punitive regulator in the world when it comes to imposing financial penalties for non-compliance, levying half of the global AML/sanctions fines amount. US regulators have also hit foreign banks hard, imposing fines on European banks nearly five-times that imposed against US banks.

Fines for sanctions violations account for 56% of all violations levied globally (by $). This differs from APAC and Europe where AML-related fines far outweigh fines for sanctions violations. The Nordics is the only region that fines their own domestic banks more than international banks.

Marc Murphy, Fenergo’s CEO, added: “As a firm dedicated to providing the financial industry with client onboarding and regulatory compliance solutions, Fenergo continuously captures and maintains this data as part of our day-to-day business. It is our experience and deep understanding of global financial regulations that permits us to extrapolate global trends, allowing us to offer this additional insight to our clients.”

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