Grygo is chief content officer for FTF.
Have you ever wondered how much financial services firms have paid over the past decade in fines when they have been in violation of anti-money laundering (AML), know your customer (KYC) and sanctions regulations?
Fenergo, mostly known for its client management solutions, decided to find answers to that question using “various sources, including regulatory and news outlets.”
Since the Great Recession when Lehman Brothers fell, firms across the globe have paid a stunning $26 billion in fines, according to the Fenergo research.
In fact, Fenergo officials have parsed out the data by region, country, regulator and types of fines imposed. They have released what they say is a list of the top 10 key highlights of the research:
- Not surprisingly, the U.S. represents almost half, or 44 percent of “all global regulatory AML/KYC fines, yet almost 91 percent of the total value ($23.52 billion),” according to the Fenergo research;
- In Europe, authorities have fined 83 firms “totaling $1.7 billion the majority being imposed by the UK‘s Financial Conduct Authority (FCA),” officials say;
- For the Asia-Pacific markets “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);
- Fenergo officials say the U.S. Department of Justice “is the most punitive regulator in the world when it comes to imposing 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.”
- S. regulators have cast a wide net and have “hit foreign banks hard, imposing fines on European banks nearly five times that imposed against U.S. banks;”
- Globally, three years ago, “2015 was the most punitive year for fines, with $11.52 billion levied against banks;”
- Fenergo finds that “$8.9 billion was the highest single fine ever levied against a bank by one regulator (BNP Paribas paid that amount in 2014 to U.S. authorities after admitting to sanctions violations.)
- “Fines for sanctions violations account for 56 percent of all violations levied globally (by $),” according to Fenergo. “This differs from APAC and Europe where AML-related fines far outweigh fines for sanctions violations;”
- “The Nordics is the only region that fines their own domestic banks more than international banks (majority of financial institutions get fined by international regulators rather than their own regulators),” according to Fenergo.
While it’s not huge news that the U.S. and Europe have led the way in levying fines for noncompliance, there are signs that other regions may be catching up after all these years.
“Up until now, the focus of regulators had been on the U.S. and European markets,” says Laura Glynn, director of global regulatory compliance at Fenergo, in a prepared statement. “However, we are now witnessing regulators in Asia Pacific and The Middle East markets becoming more proactive in their supervisory efforts,” Glynn adds.
The vendor offers more details about its findings here.
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