USD 10.4 Billion Paid by Financial Groups in 2020 in Regulatory Fines

Know Your Customer and Anti-money Laundering non-compliance penalties rose 26% this year. Many prominent institutions have been fined for not following the AML and KYC regulations in the year 2020.

A total amount of $10.4 billion has been paid by the financial institutions for not complying with AML, data privacy, KYC, and the European Union regulations.

The total count of the fine is 198 which is a 141% increase from the previous year. Goldman Sachs faced the action of a total of $6.8 billion for being involved in a Malaysian scandal. In 2019, US regulators fined foreign banks 9 penalties of $2.4 billion for violating the KYC and AML sanctions.

Office of Financial Sanctions Implementation (OFSI) fined Standard Chartered (UK) for violating Russia’s sanctions, in 2020. The penalty was of $25.4 million, being the largest ever penalty imposed by the regulators. 

Rachel Woolley, global director of financial crime at Fenergo, said. “2015 was a record year for enforcement actions but 2020 has the potential to match or top that year’s total if significant investigations are concluded by the end of the calendar year. There have been two notable shifts, APAC has overtaken the US in terms of the value of enforcement actions for the first time since 2015 – driven by recent FATF activity and the repercussions of the 1MDB scandal, and there has been an increased focus on individuals being penalized than we have seen in previous years.”

Most fines were received by financial institutions based in the USA. These fines were a total of $7.489 billion. Goldman Sachs spiked the results as 91% of the fine from the USA consisted of it. 

While the penalties for data privacy from around the world consisted of $88.6 million which highlighted the issue of cybersecurity.