Regulators and Enforcement Actions are driving the agenda

In a world of ever-increasing regulation, regulators globally continue to focus on financial crimes that include money laundering, terrorist financing, sanctions evasion, bribery and corruption, fraud, tax evasion and market abuse. Demonstrating that a financial institution or professional services company – whatever its size or scope – is working hard to meet its legal and regulatory financial crime obligations has become a compliance and commercial imperative.

Failure to meet financial crime obligations can result in severe penalties. Analysis for the past calendar year shows that in the UK, FCA fines have hit a record-breaking £560 million and in the US $3.9 billion worth of fines were levied by the SEC as of November for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC), and sanctions regulations, amongst other failings.

Some notable cases and fines include:

  • The FCA pursued and won it’s first criminal action, resulting in a £264 million fine against NatWest Bank for money laundering failings between 8 November 2012 to 23 June 2016
  • The FCA also fined HSBC £63.9 million for deficient transaction monitoring controls over a period of eight years from 31 March 2010 to 31 March 2018.
  • The HKMA fined four major banks HK$44.2 million for violations of systems and controls required by the AMLO enactment of 2012
  • The US SEC brought charges against a Global Crypto Lending Platform for $2 billion worth of fraud
  • In Malaysia, a $698 million settlement was paid for Anti-Bribery and Corruption and AML failings committed by a government-run strategic development company

Regulations continue to evolve and are increasingly complex

Heads of Financial Crime Compliance are overwhelmed by the demands of the regulatory regimes in the countries in which their firms operate. Not only do they have to navigate the complex regulatory frameworks unique to each jurisdiction, but they must also anticipate and plan for future changes to laws and regulations.  Plenitude’s RegTech products such as Compass and RegSight, allow financial institutions to stay on top of their obligations and effectively plan for future changes to laws, regulations and guidance.

Compliance is complex, costly and sometimes inefficient

Regardless of a firm’s size, client or product focus, financial crime obligations must be met in every jurisdiction where a firm operates. All too often, this involves notoriously resource-intensive and cost inefficient systems and controls.

While global firms may have the budgets to invest in new technology and innovative solutions to drive greater efficiency and better risk management outcomes, some regional and smaller firms face significant challenges with regards to implementing effective and cost efficient systems and controls.  Plenitude’s RegTech products reduce the cost of implementing controls related to obligations management,  client risk rating and assessment of jurisdiction risk, providing greater assurance that regulatory obligations are being met.