Volume and value of fines down 26% and 47% respectively in H1 2021 from 2020, as fallout from major scandals passes
London, Dublin, New York, Singapore – 19th August 2021: Fenergo, the leading provider of digital transformation, customer journey and client lifecycle management (CLM) solutions, today released its findings on global financial institution fines for the first six months of 2021. The report shows that for the year to date, penalties have totalled $937.7 million for non-compliance with Anti-Money Laundering (AML), Know your Customer (KYC) and data privacy regulations. The total volume of fines levied to financial institutions for these breaches was 85, a year-on-year drop of 26%. The average value of enforcement actions against financial institutions for AML-related compliance breaches is 40% lower than in 2020.
Notable findings of the H1 analysis:
- Major action against a US-headquartered retail bank totalling $390 million for breaches of the Bank Secrecy Act between 2008 and 2014
- In the first half of 2021, three fines amounting to $9.1 million were issued by the Office of Foreign Assets Control (OFAC) to a bank, a digital assets firm and a payment processing provider for sanctions violations related to Syria highlighting a more punitive response from the regulator compared to 2020 ($1.3m in total fines)
- Global data privacy fines to financial institutions amounted to $7.6 million – with prominent action in Norway and Spain, including the largest fine ever issued by the Agencia Española de Protección de Datos (AEPD) at $7.3m
- North America has issued the largest share of fines ($716 million) at an average value of $29.8m vs the average value of $4.9m in Europe
- Six fines (UK, Malta, Dubai and Lithuania) totalling $14.3m related to gambling and gold trading were issued in H1 2021 – highlighting an increased focus on AML regulation and a widening of the net beyond financial services to fight money laundering
- Approx. five individuals in the US, France and UAE were fined $8.3 million for their role in AML violations at financial institutions
- Enforcement action ($79.7m) was taken against a leading Swiss wealth management firm for its involvement in channelling the proceeds of bribery associated with FIFA and broadcasting rights for major football tournaments from 2013-15
It’s important to note too that while the volume and the value of enforcement actions may be down on previous years, that doesn’t mean there is less financial crime occurring. The scale of fraud that took place during the pandemic, particularly in the US, will prompt investigations into financial institutions for facilitating the crimes due to ineffective systems and controls. This will lead to enforcement actions further down the line.”
Countries that issued the most fines by value:
- USA $711,206,765
- Switzerland $85,210,112
- Norway $48,339,685
- UK $32,954,630
- UAE $12,895,393
There was also a significant uptick in data privacy fines to financial institutions this year. GDPR related fines totalled $7.6 million – not far off the full year fine value of $8.2 million for 2020 – with European countries including Norway and Spain taking robust action for breaches of customer data privacy. The most significant fine levied for data privacy was to a major Spanish bank for unlawfully processing clients’ personal data and not providing sufficient information regarding the processing of personal data. This $7,293,079 action levied by the Spanish data protection authority, AEPD, is the largest fine it has ever issued.
Notes: All monetary amounts mentioned in this press release is expressed in US dollars.