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. Examples of such fines include:
- September 2018: Dutch bank ING Groep NV (INGA.AS) admitted criminals had been able to launder money through its accounts and agreed to pay 775 million euros ($900 million) to settle the case with the Dutch prosecutors
- June 2018: The FCA fined Canara Bank £896k and imposed a restriction, preventing it from accepting deposits from new customers for 147 days
- January 2017: The FCA fined Deutsche Bank AG (Deutsche Bank) £163m for failing to maintain an adequate anti-money laundering (AML) control framework
- November 2015: The FCA fined Barclays £72m for failing to minimise the risk that it may be used to facilitate financial crime
- December 2012: HSBC was guilty of a “blatant failure” to implement anti-money laundering controls and wilfully flouted US sanctions. The bank was forced to pay a record $1.9bn (£1.2bn) to settle allegations it allowed terrorists to move money around the financial system
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.