KYC and AML sanctions reach $5.6 billion in first half of 2020

A new study by Fenergo reveals that Know Your Customer (KYC) and Anti-Money Laundering (AML) fines have reached $5.6 billion this year. This is 30 per cent down on the same time last year, but it is expected that 2020 sanctions will match or surpass last year’s high of $8.4 billion with a number of high value fines in the wings. 

According to the study, sanctions were highest for organisations based in the APAC region with violations experiencing a marked increase, from US$3.5 billion to almost $4 billion. The most substantial rise in fines were seen in countries such as Pakistan (845% rise compared to mid-year 2019), Hong Kong (223%), and Taiwan (116%). In 2019 the UK was the second most active country issuing 12 fines, behind the US’s 25 sanctions.  

KYC and AML experts warn that COVID-19 has had a dampening effect on regulatory and supervisory activity worldwide, but that regulators are stressing the importance of vigilance and continued reporting on suspicious activity to help ensure that financial crime is detected and prevented throughout the pandemic. 

Fraud is well known to increase during recessionary periods and studies suggest that fraud is currently at its highest ever level, particularly identity theft. Consequently, financial organisations are being urged to put processes in place that both mitigate the risk of fraud whilst helping them to remain KYC and AML compliant. 

One of the fastest growing forms of fraud is deceased identity fraud; where criminals use the personal information of the deceased to commit identify fraud. It is growing because this type of fraud is seen as an easy win since it is much harder to identify than ordinary identity fraud and on average goes undiagnosed for around four years. Halo, our KYC/AML compliant identity fraud prevention solution enables financial organisations to quickly and easily identify high-risk applicants and cut them off at the source saving thousands of pounds in bogus payments and hundreds of investigative man hours every year. With the need for tighter controls implementing a compliant, cost effective, screening solution demonstrates commitment to KYC and AML regulations.