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Tuesday 25 June 2019


Regulators issue $26bn of fines since 2008

Written by Hannah McGrath

Financial regulators have issued more than $26 billion of fines for non-compliance with sanctions, Anti-Money Laundering (AML) rules and Know Your Customer (KYC) in the past ten years, according to a new study which ranks the UK’s Financial Conduct Authority (FCA) as the toughest regulator in Europe.

A data study compiled for Fenergo, a client lifecycle services provider for financial institutions, found that the FCA accounted for the majority of fines issued by European regulators, which issued a collective $1.7 billion of penalties over the past decade.

The findings are based on various data points from the past ten years including regulatory and news outlets providing insight into fined by region, country, regulator and types of fines imposed and highlight the different approaches from regulators to breaches from domestic and domestic financial institutions.

A geographical breakdown of the data revealed the US issued nearly 44 per cent of all AML/KYC fines issued globally, yet accounted for almost 91 per cent of the total $23.52 billion of fines levied over the last ten years.

The US was also the most stringent when it came to imposing sanctions on the activities of European Banks and imposed nearly five times more in sanctions than it levied against US banks.

The most punitive year for fines globally was 2015, with $11.52 billion issued against banks across the 12 month period.

The highest single fine ever levied against a bank by one regulator was the unprecedented $8.9 billion fine imposed on BNP Paribas by US authorities following claims that it violated economic sanctions against Sudan, Cuba and Iran.

Nordic countries including Denmark, Finland, Iceland, Norway and Sweden featured as the only region to fine their own domestic banks more than international banks, whereas the majority of financial institutions were fined by international regulators rather than their own regulators.

Laura Glynn, director of global regulatory compliance at Fenergo, said: “Up until now, the focus of regulators had been on the US and European markets. However, we are now witnessing regulators in Asia Pacific and The Middle East markets becoming more proactive in their supervisory efforts.”

The UK’s regulators have stepped up their action in recent months. Last week the Information Commissioner’s Office (ICO) issued the maximum £500,000 fine on credit rating agency Equifax after a massive data breach left the data of 15 million customers exposed.

Yesterday it was reported that the FCA is weighing up whether to impose a fine of as much as £30 million on Tesco Bank following a cyberattack in 2016.

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