Regulators and Enforcement Actions are driving the agenda

In a world of ever-increasing regulation, scrutiny is honing in on financial crimes that include money laundering , terrorist financing, sanctions evasion, bribery and corruption, fraud and tax evasion. Demonstrating that a financial services organisation – 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.  Mid year analysis shows that by the end of July 2020, penalties have totaled $5.6 billion for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC), and sanctions regulations.

Key findings are as follows:

  • US authorities levied fines of over $900 million to an Israeli bank for tax evasion and money laundering involving the Fédération Internationale de Football Association (FIFA)
  • Swedish banks were fined $536 million for lacking sufficient AML governance and controls in the Baltic states
  • Malaysian regulators issued a significant fine to a major US headquartered global bank at $3.9 billion
  • Fines issued by APAC regulators saw a dramatic increase from $3.5 million to almost $4 billion

Regulation is multiplying

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.

Compliance is complex, costly and 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 processes.

While global firms may have the budgets to invest in outsourced, possibly even proprietary innovation, regional and smaller firms need an alternative approach to ensure that they can comply today, are fit for tomorrow and can continue to compete and grow.