A staggering $26 billion in fines has been imposed for non-compliance with Anti-Money Laundering (AML), Know Your Customer (KYC), and sanctions regulations in the last decade, according to new research.
The research was conducted by Fenergo, a provider of client lifecycle management solutions for financial institutions. The data, in the form of an interactive infographic, details the global fines activity of regional and in-country regulators over the past 10 years. It’s based on various sources, including regulatory and news outlets providing insight into fines by region, country, regulator and by types of fines imposed. The data highlights how regulators have approached breaches from foreign versus domestic financial institutions.
The United States accounts for nearly 44 percent of all global regulatory AML/KYC fines, and 91 percent of the total value ($23.52 billion). In Europe, 83 fines, totaling $1.7 billion, have been imposed, most by the U.K. Financial Conduct Authority (FCA). The findings also reveal that Asia Pacific regulators have levied 79 fines worth almost $609 million, commencing in 2011. The Middle East still lags behind other regions for financial enforcements, recording a total of $9.5 million in the last 10 years.
“Up until now, the focus of regulators had been on the U.S. and European markets,” said Laura Glynn, director of global regulatory compliance at Fenergo. “However, we are now witnessing regulators in Asia Pacific and the Middle East markets becoming more proactive in their supervisory efforts.”
The U.S. Department of Justice, according to the report, imposes the most financial penalties for non-compliance, levying half of the global AML/sanctions fines amount (nearly $14 billion), followed by the New York Department of Financial Services at $3.6 billion. The highest single fine ever levied against a bank by one regulator was $8.9 billion—a settlement reached between French banking giant BNP Paribas and the U.S. Department of Justice in 2014. It also marked the first time a global bank agreed to plead guilty to large-scale, systematic violations of U.S. economic sanctions.
U.S. regulators have hit foreign banks hard, imposing fines on European banks nearly five times that imposed against U.S. banks. The Nordics is the only region that fines their own domestic banks more than international banks (most financial institutions get fined by international regulators rather than their own regulators).
Globally, 2015 was the most punitive year for fines, with $11.52 billion levied against banks. Fines for sanctions violations account for 56 percent of all violations levied globally (by dollar). This differs from APAC and Europe, where AML-related fines far outweigh fines for sanctions violations.