Banks and other financial institutions entered 2017 facing an increasingly daunting framework of anti-money-laundering (AML) laws and regulations. During the past several years, regulatory agencies have been aggressively stepping up their enforcement
actions, and they’ve levied huge fines for compliance failures.
For instance, the New York State Department of Financial Services (NYDFS)1 and the UK Financial Conduct Authority recently issued penalties of more than $600 million for AML failings at Deutsche Bank from 2011 to 2015 in connection with securities trades originating in Russia. In addition, the Financial Industry Regulatory Authority’s 2017 Regulatory and Examination Priorities Letter indicated that AML will remain a focus—especially in areas where the agency has observed shortcomings. The letter expressed
specific concern about lapses in data integrity and inadequate surveillance systems that have caused gaps in firms’ automated trading and money movement surveillance systems.
Anti-money laundering compliance continues to present a significant challenge for financial institutions in the United States and abroad—especially given the record-breaking fines that regulatory bodies imposed in 2016 through early 2017. We highlight five key steps for financial institutions to take in 2017 to avoid potential regulatory sanctions and fines.