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AML focus moving to non-financial sector

encompass corporation, a provider of automated Know Your Customer (KYC) solutions, recently analysed Anti-Money Laundering (AML) related penalties between 2002 and April 2019, with a particular focus on 2018 and 2019. The research covered the numerous global banks which have received multi-million dollar fines in the past year.

Key highlights from the research are as follows:

  • 2019 looks set to be the year of record AML fines, overtaking the 2014 ($10.89bn) record
  • $7.7bn of AML fines were handed out in January to April 2019, vs $1.16bn in the same period in 2018
  • US-based regulators penalise institutions the most, followed by the UK
  • Average fine over the past 17 years is $155m, while the median fine is $2.8m
  • Banks still receive the majority of penalties, but there is a growing focus on other sectors.

 Key findings

The findings show that in January to April of 2019 alone, the combined value of penalties given out was over 70% of the total awarded in the whole of 2014 – the year which currently holds the record for the highest total value of fines. This is nearly double the value of AML fines from the entire of 2018 ($4.27bn), despite the number of penalties being roughly a third (9 in January-April 2019 vs 29 in 2018).

Source & Copyright©2019 - encompass

Wayne Johnson, Co-Founder and CEO of encompass corporation, commented: “Ever since the financial crash in 2008, there has been an ever-growing focus on the identification and prevention of money laundering and other financial crimes at financial institutions. Since 2014, total AML penalties have remained above a billion dollars every year, perhaps reflecting the increased regulatory focus on this area since the Panama Papers were leaked in 2015. Multi-million dollar fines are becoming the ‘norm’, and 2019 looks set to be the biggest year yet in terms of the value of fines handed out by regulators.”

He continued, “Given their significance in the global financial markets, it isn’t surprising that the focus for fines remains predominantly on banks, although we are increasingly seeing the spotlight land on companies in other industries, such as legal, gaming and cryptocurrency. This shows that there is a growing recognition that these sectors are also prime channels for money-laundering, and we expect to see this shift to non-financial services businesses continue in the coming months and years.”


CTMfile take: Great analysis. The shift to monitoring non-financial sector, as well as, banks is vital.


This item appears in the following sections:
Anti-Money Laundering Fraud Prevention
Terrorist Financing
ID Systems & Services in Fraud Prevention

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