A near record year for money laundering: Banks hit with $10 billion in fines
12 Mar 2020

Regulators hit banks with a near record $10 billion worth of fines in a 15 month period through 2019, and the figure is expected to increase in 2020. That’s according to a new report from Fenergo, a European startup that makes software to help financial institutions detect illegal transactions.

According to Fenergo’s research, 60.5% of the fines came from banks violating anti-money laundering rules, while nearly all of the rest—38.7% of fines—arose as a result of transactions with countries under sanctions. In the latter case, it was U.S. regulators that levied almost all such fines, amounting to a total of $3.67 billion in penalties.

One remarkable finding in the report is that, despite a spate of new data privacy laws, they resulted in almost no fines. Penalties related to privacy laws, including Europe’s GDPR, accounted for barely $1 million or 0.01% of the $10 billion total.

Overall, the $10 billion of fines in the recent 15 month period contrasts with the period of 2008 to 2018 when the total for the entire decade amount to $26 billion (though one year, 2015, saw a higher total than the most recent figure). According to Fenergo, the surge in fines stem in part from geopolitics, as regulators—especially those in the U.S.—levied much stiffer penalties on banks abroad versus those in their own country.

In an interview with Fortune, Fenergo CEO Marc Murphy also pointed to new and complex regulations that have proved to be a challenge for the compliance departments of many banks—as well as criminals’ adeptness in dodging money laundering and know-your-customer rules.

By Jeff John Roberts, Fortune, 11 March 2020

Read more at Fortune

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