A number of banks have breached Anti Money Laundering regulations in the past and are now on the radar of financial regulators. Fines, threats to reputation and career brakes are often among the consequences.
Financial Crime on the Rise – COVID-19 Being One of the Reasons
Banks and regulators are facing an uphill battle to combat financial crime – and the gradient has increased throughout COVID-19. The pandemic has led to a significant increase in fraud, money laundering and terrorist financing as cybercriminals seek to exploit heightened security risks – all while financial institutions face operational challenges resulting from social distancing measures, limited services, staff shortages, and suspension of conventional servicing channels such as branches.
Suspicious Activity Reports Related to Money Laundering Flood the Financial Authorities
In a number of countries, such as Germany and Switzerland, suspicious activity records related to money laundering are at record levels. In the UK, the UK Financial Intelligence Unit (UKFIU) saw another record number of suspicious activity reports (SARs) during 2019/20, receiving and processing 573,085 (a 20% increase on the previous period). The most significant growth in SARs was seen from financial technology (fintech) companies. They submitted 83,609 SARs in 2019-20 – up 263.94% from 2018-19 (22,973). Fintech thus accounted for 64% of the total increase in overall SARs.