AML Fines 2021: Regulators Continue to Be Strict with Enforcement amid COVID-19

Research revealed that global regulators have remained strict with financial crime and sanctions compliance failings despite the COVID-19 pandemic. Governance and risk consultancy firm, Kroll says anti-money laundering (AML) fines in 2021 are likely to reach the high levels seen in 2020 and 2019, indicating the need for AML compliance officers to be vigilant more than ever.

Kroll found that total fines for AML and sanctions compliance shortcomings rose significantly in 2020 compared to 2019. Regulators’ punitive measures were stricter despite the COVID-19 pandemic. Due to this, many financial institutions faced operational constraints and potential compliance lapses.

Soaring numbers

According to Kroll’s latest Global Enforcement Review, fines related to financial crimes such as money laundering, bribery and sanctions totalled US$4.67 billion in 2020 compared to US$3.75 billion in 2019. However, the number of big fines (greater than US$1 million) issued fell to 56 in 2020 from 61 in 2019. Global financial crime fines totalled US$1.13 billion from 23 regulatory actions during the first half of 2021.

financial crime fines

number of financial crime fines

Kroll noted that AML remains a key area of focus for regulatory enforcement action globally. Among financial crimes, money laundering failures have on average dominated in terms of both the number of fines and fine values over the past five years. AML fines for banks and financial services soared to US$2.22 billion in 2020 from US$444 million in 2019. The number of AML fines stayed the same at 45 for both 2020 and 2019.

Global watchdogs issued US$994 million of AML fines in 17 actions in the first half of 2021. The value for full-year 2021 is expected to hit last year’s tally of US$2.22 billion.

Regional break-up

Among regions, the UK and EU cumulatively registered the highest number of fines in 2020 at 36, compared to 35 in 2019. For the first half of 2021, the region had a total of 15 fines.

In the US, the tally rose to 29 in 2020 from 27 in 2019. The region has accumulated 17 fines during the first half of 2021. Regulators in the APAC region handed out 10, 16 and 19 fines in the first half of 2021, 2020 and 2019, respectively.

number of fines by region

What do the numbers indicate?

The numbers largely indicate that regulators of  AML compliance have remained just as strict in their scrutiny throughout the pandemic.

“Investigations were not paused for Covid-19,” Financial Times quoted Claire Simm, head of financial services compliance and regulation at Kroll, as saying. “The value of fines has surged as regulators impose tougher penalties, continuing to send the message that despite any obstacles, enforcement remains a top priority.”

Since the 2008 global financial crisis, the US has been leading the way in issuing fines, especially AML-related fines. In recent years, however, the Nordics and Australia have led the way with significantly high penalties.

The year 2020 was significant for the EU region in terms of AML penalties as Sweden’s Finansinspektionen issued Europe’s largest fine of  €360 million against Swedbank. The regulator noted that the country’s oldest and largest lender failed to ensure its affiliates in Estonia, Latvia and Lithuania had effective AML programs in place from 2015 to 2019.

“Globally, the number of fines issued in 2020 was at the same level as those in 2019, however, the total value of AML enforcement fines is five times higher in 2020 following numerous substantial fines by Nordic regulators,” says Kroll. “Moreover, fine amounts in 2021 may reach similarly high levels as previous years, with the total value of AML fines as of June 2021 nearly half of the 2020 and 2017 totals.”

The upcoming changes in AML regulations in the EU, including the creation of a new pan EU supervisory authority, is expected to result in increased enforcement action and larger fines within the region in the coming years.

According to Kroll, AML management, suspicious activity monitoring, customer due diligence, and compliance oversight are the most common failings across all regions during the last five years. The consultancy noted that firms should continue their investment in these areas to minimise financial crime risk and potential punitive actions from regulators.

How technology can help financial institutions manage AML compliance

When it comes to AML compliance, financial institutions are often troubled by regulatory uncertainties, complex money laundering techniques, outdated compliance systems, scarcity of skilled compliance staff and inefficient allocation of staff. A shortfall in any of these areas might lead to enforcement actions including hefty fines.

With modern technologies such as artificial intelligence and machine learning at the forefront, compliance departments can address many of these issues effectively. With proper implementation, these technologies can bring in a paradigm shift in the way financial institutions approach financial crimes and compliance risk at large.

This is an area where machine learning-powered platforms like Tookitaki can add value. Our end-to-end AML/CFT analytics solution, the Anti-Money Laundering Suite (AMLS), can create next-generation compliance programs, encompassing key processes such as transaction monitoring, AML screening and customer risk scoring on a single platform.

We enhance process efficiency and augment compliance risk cover with industry-first approaches: Typology Repository Management and Automated Model Management. Some of the benefits of our solution, which can take away much of the burden from the compliance staff, are listed below:

  • Improved risk coverage by detecting complex money laundering cases, including new-age methods such as cryptocurrencies and e-wallets.
  • Enhanced process efficiency with accurate triaging of alerts into three different buckets – L1, L2 and L3 – with L3 being the high-risk bucket.
  • Faster alerts disposition with explainable, defensible, and transparent machine learning models.
  • Faster business decision with around 70% reduction in manual work.
  • Auto creation of machine learning models and evolving them through Champion-Challenger process thereby minimising building and maintenance process.
  • Role-based dashboards providing complete business intelligence and actionable insights

If you want to know more about our AML compliance solutions and get a demo, please contact us.

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HKMA in a report shared comprehensive hands-on experience and insights from respondents to better understand the factors and dependencies affecting AML/CFT Regtech adoption. The regulator collaborated...

How to Address Present-day Sanctions Screening Pain Points with AI

Sanctions risk of financial institutions is evolving in line with the global social, economic and political changes. As seen in recent news, governments across the globe are increasingly relying on sa...

Tookitaki Got Selected for FinTech Program: Asia meets Tokyo

Tookitaki has been listed among 8 Fintech startups in Asia for FinTech Program: Asia meets Tokyo, an accelerator launched by the Tokyo Metropolitan Government (TMG). We have been selected for our anti...

AML Alert Management: How AI can Augment Your Compliance Efficiency

The financial sector is facing one monster of a problem at the moment. As today’s financial institutions deal with millions of daily transactions, several thousands of routine financial transactions...

Tookitaki Recognised for Innovative Use of AI & Machine Learning

Tookitaki has won the Regtech Award for AI & Machine Learning and was highly commended in the solutions category for AML/CTF Compliance, in the 3rd Regulation Asia Awards for Excellence 2020 ...

Our UOB Success Tale: Setting a New Benchmark for AI-based AML Compliance

Tookitaki achieved a rare and historic milestone as our Anti-Money Laundering Suite (AMLS) solution went live within the premises of United Overseas Bank (UOB), one of the top 3 banks in Singapore.

Tookitaki Wins 2020 WITSA Digital Innovation Award

Tookitaki has won the 2020 Digital Innovation Award from the World Information Technology and Services Alliance (WITSA) as part of the industry body’s Global ICT Excellence Awards. Nominated by...

Money Laundering via Cryptocurrencies: All You Need to Know

Money laundering via cryptocurrency has been going on for a while now. We’ve all heard of Bitcoin, Ethereum and Dogecoin. Crypto is used by financial criminals globally but how are they getting away...

CNA 938 radio interviews Tookitaki Co-founder Jeeta Badopadhyay

Tookitaki Co-founder and COO Jeeta Bandopadhyay was named among the Singapore 100 Women in Tech (SG100WIT) List in September 2020. A collaboration between the Singapore Computer Society (SCS), IMDA, S...

Need for New Customer Risk Rating Models: Not All Customers Are Created Equal

Being estimated at between US$800 billion to US$2 trillion every year, money laundering is a serious problem for the global economy. While regulators and financial institutions are working hard to pre...

Is AML Compliance Heading for a New Normal in the Age of Digital Payments?

Increased digitization has influenced various businesses and brought in a paradigm shift in the way they create business models and approach growth opportunities. Moving away from conventional transac...

Excel to AI: How Reconciliation Tools Evolve for Better

In the world of finance, reconciliation is the process of comparing two related sets of records or two accounts at the end of a specific accounting period to find out if account balances are matching ...

Lessons Not Well Learned: 2020 AML Fines Cross 2019 Total

If research is to be believed, institutions across the globe have not done enough in the anti-money laundering (AML) compliance area. Data from consultancy Duff & Phelps revealed that AML fines in...

Exploring AML Risks in COVID-Era and the Ways to Address Them

The world continues to battle the COVID-19 pandemic and the crisis it brought in is unprecedented in the history of humankind. While there are a number of pandemic-related factors contributing to the ...

AML Amid COVID-19: Watch out for These FBI-listed Fraud Schemes

There has been a rise in the number of cybercrimes and fraud schemes across the globe ever since the proliferation of the COVID-19 pandemic. Criminals, in general, are taking advantage of people’s s...

OCC Spring Risk Perspective: 5 Takeaways on Compliance Risk

Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of...

How Criminals Used COVID-19 Sales Pitch to Defraud, Launder Money

As the world is working hard to contain the spread of the COVID-19, criminals continue to take advantage of the pandemic. They are devising sophisticated methods to defraud people and launder the crim...

5 Top Myths and Facts about AI Implementation in AML Programs

We are more confirmed about the power of Artificial Intelligence (AI) to transform lives and businesses now. There are countless possible applications of AI and machine learning at present, and we see...

Typology Repository Management: Solving AML Problems Via Collective Intelligence and Continuous Learning

Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of...

Whitepaper: Automated AML Pattern Detection Using Network Science

Despite its general strength, the US federal banking system is apparently susceptible to the ongoing economic weakness caused by the rampant spread of coronavirus. Earlier this month, The US Office of...

Money Laundering Amid COVID-19: What Regulators Across Globe Say

As the world continues to fight against the COVID-19 pandemic, there are reports that criminals are taking advantage of the difficult situation. They are seizing the moment to proliferate their crimin...

How will Art Cease to Be a Preferred Money Laundering Vehicle?

Money laundering via high-end art and antiquities is not new yet it is difficult to detect. Art-related money laundering amounts to about US$3 billion per year, according to this blog, quoting the Uni...

Beware! Money Mules in Demand amid COVID-19. Here’s an Effective Cure

If reports are to be believed, cybercrooks are taking advantage of the COVID-19 situation. They are targeting people who were laid off or working from home due to the pandemic to work for them as mone...

How do we weather a tornado of change?

“Great works are performed not by strength but by perseverance” – Samuel Johnson All of us are in challenging times. However, we cannot afford to be lethargic to life, work, and busi...

Roundtable Rewind: Embracing Next-gen Tech & Collaboration Key to Sustainability

As a regtech player with a vision to enable sustainable compliance programs in financial institutions, Tookitaki organized a first-of-its-kind industry roundtable in Charlotte, NC, USA to discuss oppo...

Tookitaki Appoints Industry Veteran Joe Friscia as Advisor

Tookitaki Holding Pte. Ltd. appointed industry veteran Joe Friscia, former President of NICE Actimize and BAE Systems as Advisor to the Company’s Advisory Board. Joe brings over 25 years’ extensi...

Should Modern Machines Be Ethical?

There are mounting concerns across the globe about the reliability and safety of artificial intelligence (AI) based systems and its enabling technologies such as machine learning (ML). On the air are ...

Tookitaki Raises Another US$11.7 million in Series A; Closes Round at US$19.2 million

– by Abhishek Chatterjee, Founder & CEO The Tookitaki team and I are excited to announce that we have raised an additional US$11.7 million in Series A funding, taking the total investment in...

30 Years of FATF: Notable Facts About Global AML Watchdog

The Financial Action Task Force (FATF), the intergovernmental body formed in 1989 to combating money laundering, is celebrating its 30th anniversary this year. Since its inception, the global agency p...

Tookitaki Joins Aite Financial Crime Forum as Sponsor

Technological advances have fundamentally changed the operational landscape of financial institutions. However, there are also new risks emerging in forms of sophisticated financial frauds and complex...

Will Machine Learning Replace Compliance Professionals?

The impact of modern technologies such as artificial intelligence (AI) and machine learning on job security has been a widely discussed topic today. Of course, AI has advanced very quickly in the last...

6 Most Prevalent Cyber-Laundering Methods in APAC

Despite being a medium to exchange information in real-time and with scale, the Internet is being misused in several ways. Among the slew of financial crimes facilitated by the Internet, money launder...

What Made Us Earn the WEF Technology Pioneer Title

Tookitaki has bagged another global acknowledgement for its outstanding works in the regulatory compliance field. Our company was selected among hundreds of candidates as one of the World Economic Fo...

We Stay as a Team, We Win as a Team and We Flourish as a Team

“Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to a...

ABA Regulatory Compliance Conference: 10 Sessions You Can’t Miss

The 2019 edition of the American Bankers Association (ABA) Regulatory Compliance Conference is a few more days away. Organized by the Washington, D.C.-based trade association, the conference is touted...

Tookitaki AMLS Wins SBR Technology Excellence Award 2019

Tookitaki’s Anti-Money Laundering Suite (AMLS), an end-to-end machine learning-powered transaction monitoring and names screening solution, has bagged the inaugural Singapore Business Review Tec...

Watchdogs Grow Optimistic about AI Prospects at Banks

Proper regulation of banking operations is important as any failure in the banking system would affect the wider economy. Therefore, banking is one of the most regulated industries across the globe. F...

Pitfall of Black Box AI at Banks: Explaining Your Models to Regulators

The use cases of artificial intelligence (AI) and machine learning in front-office, middle-office and back-office activities at banks are growing slowly but steadily. The major areas of AI play includ...

AI for Regulatory Compliance at Banks: 4 Assessments Before You Okay the Solution Proposal

Banking is one of the industries where artificial intelligence and machine learning find their applications at a rapid pace. Regulatory compliance within banking is an area which has become a costly a...

We Believe in Innovation, the Key to Survival and Growth

“Innovation distinguishes between a leader and a follower.” -Steve Jobs What comes on the top of your screen when you google the meaning of the word innovation is – the introduction of somet...

Compliance Functions in Need of a Technological Overhaul. Can Machine Learning be the Game-Changer?

McKinsey in its latest compliance benchmarking survey found that compliance function at financial institutions has reached “an inflection point” and current compliance standards are in an “incho...

Tookitaki Raises US$7.5 mn Series A from Global VCs to Transform Regulatory Compliance

Tookitaki, a regulatory technology company that aims to enable financial institutions to develop sustainable compliance programs, has raised US$7.5 million in Series A round. The round was co-led by L...

The Biggest Money Laundering Cases: From Wachovia to Danske Bank

Money laundering – the criminal activity of processing criminal proceeds to disguise their origin – is one of the gravest problems faced by the global economy, and its size is growing rapidly. It ...

A Modern Approach to Address the Reconciliation Challenges of Financial Services

Reconciliation of transactions is deemed critical for the smooth running of every financial institution. The speed and accuracy of data reconciliation can distinguish a successful institution from its...

Busting a Myth: Compliance Officer’s Job is All About Risk

Regulatory compliance has become a dreadful task for banks after regulators across the globe set stricter norms in the aftermath of the 2008 financial crisis in an effort to prevent financial crimes s...

Attending ACAMS Conference in Singapore? Tookitaki Awaits You with Its Disruptive AML Solution

“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility, that’s it.”- Jeff Bezos Singapore is hosting ACAMS’...

MAS’ Stress on Transaction Monitoring for Effective AML/CFT Compliance and Machine Learning is the Answer

Singapore is known for its top-notch AML/CFT regime created through up-to-date legislation, stringent policy and uncompromising supervision to safeguard against the abuse of the city state’s financi...

Mifid II and the Pressing Need for a New Reconciliation Approach

The financial services industry in the EU has been confused with the introduction of a revamped version of the Markets in Financial Instruments Directive (Mifid II). The ambitious regulatory reforms t...

Is Automated Reconciliation Next to Impossible in Today’s Complex Financial World?

The 2008 global financial crisis and fairly new regulatory requirements like Basel III asked financial institutions (FIs) to cut operating costs and adopt a lean operations structure, pushing FIs to r...

Modern Tech to Reshape US AML Compliance with Regulators’ Recent Handshake

George Bernard Shaw once said: “Those who cannot change their minds cannot change anything.” The past week has seen a significant change of mind from financial regulators in the US in their ardent...

Skills Development: We Have Talents and We Strive to Multiply Them

“Mastery lies on an infinite continuum, and as a result, we will never reach the end. We can, however, see to it that we are as far along that continuum as our circumstance allows.” ― Chris Mat...

It’s Our Fourth Founding Day; Taking a Pause to Cherish Our Simple but Awesome Journey

Today, as we step into our 4th year of foundation, I feel proud and honored to be leading Tookitaki that has been successful in creating added value to all its stakeholders. I was never a CEO and Took...

Tookitaki Expands into the US with New Office in Charlotte

SINGAPORE, Sept. 24, 2018: Tookitaki Holding Pte Ltd, a leading regulatory technology company, is pleased to announce the official opening of its North American office in Charlotte, NC, in the Unite...

We Tame Machines but We Unleash Human Spirits

We are well aware of the fact that our progress as an organization is in the hands of our employees. The more energy, time and attention we invest in them, the more yield we receive. So, we always mak...

5 Modern Money Laundering Methods That Criminals Use

Modern money launderers are updating their methods to beat detection and avoid getting caught every single day. Where there is new technology, cryptocurrencies and processes, there is a money laundere...

Risk Management Conference: Positive Vibes from All Corners

The Risk Management Association’s (RMA) premier annual event, the Risk Management Conference, came to an end on 6 November, and Tookitaki had the privilege to attend the event which we believe was ...

Singapore Fintech Festival: Tookitaki to showcase advanced machine learning solutions in financial services

Singapore is assured of the Fintech world’s unwavering attention next week, as the city state, is hosting this year’s Fintech Festival during 12-16 November. Touted as the world’s largest platfo...

The RMA Clarion Call to Address Risks and the Tookitaki Way

Risk officers, doing your best today is good while preparing hard for tomorrow is extraordinary. Risk management at banks has become difficult due to operational and regulatory changes. The Risk Manag...