The On-Going Pressure of Complying to Money Laundering Regulations

Financial Institutions globally are under an immense amount of regulatory pressure to prevent financial crime. It is estimated that over £90 billion a year is laundered through tier one FIs, with proceeds of crime ranging from exploitative and violent crimes to large-scale drug dealing. Institutions such as Deutsche Bank, Danske Bank and Bancorp have most recently been hit with substantial fines due to such breaches in Anti-Money Laundering regulations.

At the beginning of this month, ‘Dutch bank ING agreed to pay fines, (and other payments) of around £698m after admitting errors in its policies to stop financial crime’. It is important to note that no evidence was established with regards to ING staff facilitating such criminal activities, however an increase in regular governance reviews, reviews of their CLM processes and annual ‘health checks’ could have helped mitigate such fines.


So, what causes these inefficiencies?

The regulatory landscape is ever evolving. Regulatory changes such as those implemented in the EU 4th Money Laundering Directive and UK Money Laundering Regulations 2017 have led to heightened costs, with integrated networks and an increase in cross-border transactions leaving ‘gaps’ in the infrastructure and policies of financial institutions.


Underspending on due diligence processes and financial crime prevention systems has also resulted in insufficient post-transaction monitoring and an inability to adequately access the risk of clients. As a result, many firms have faced stringent disciplinary procedures, thereby increase damaging firm reputations and adversely affecting market share prices.


If organisations do not take the issues of financial crime seriously then they will continue to face regulatory and financial penalties.


How can Lysis help?


Here at Lysis Financial, we provide a wide range of services across Governance, Risk and Compliance, including enterprise-wide risk management framework review and KYC & AML target operating model design. We have a unique partnership with iMeta that enables us to support firms on a broader CLM level. Our wide range of expertise combined with iMeta’s leading CLM technology gives us the ability to continuously adapt to ongoing regulatory change and increase firm’s regulatory surety at a reduced cost.


The Lysis AML Health Check Service is a review and assessment of a firm’s current AML framework which is carried out to help identify any regulatory gaps, inefficiencies, or areas of concern of which a firm needs to address. The assessment is done in line with current industry regulations and best practices against a firm’s current business operating model and risk appetite.


For more information please contact info@lysisfinancial.com