There was a 31% increase in the value of fines issued in H1 2024 compared to H1 2023, with the Asia-Pacific region (APAC) seeing the steepest rise in penalties, totalling more than US$46 million – a 266% increase compared to H1 2023.
The findings come from Fenergo, which said the rise in the value of fines reflects a global regulatory crackdown and technology advancements, which enhance the accuracy of detecting illicit activity.
Tracy Moore, director of regulatory affairs at Fenergo, said: “Looking towards the second half of the year, we expect this trend to continue, necessitating robust preparations for increased year-end enforcement actions.”
Historically, the second half of the calendar year has seen an uptick in enforcement actions, with financial institutions often looking to quickly settle their fines with regulators ahead of year-end reporting.
“The surge in penalties highlights the urgent need for financial institutions to strengthen their know your customer (KYC) and anti-money laundering (AML) processes, which are crucial for effective risk management, not merely regulatory compliance,” Moore told Global Trading.
“Beyond financial consequences, these penalties also introduce the risk of reputational damage, potentially affecting investor trust, share prices and the bottom line. It is imperative that financial institutions intensify their monitoring and mitigation strategies to better combat financial crime.”
Global financial regulators levied 80 fines in the first half of 2024, totalling $263,252,003 for non-compliance with anti-money laundering (AML) regulations, including know your customer (KYC), sanctions, suspicious activity reports (SARs), and transaction monitoring violations.
In the same period last year, regulators issued over $201m in penalties for the same types of violations.
The highest value fine in 2024 thus far, at US$65 million, was issued to the US subsidiary of a Canadian bank following unsafe practices related to operational, compliance, and strategic risk management controls.
©Markets Media Europe 2024
