– Fines incurred by banks to date for breaking anti-money laundering rules are “tip of the iceberg”

The multi-million pound fines levied to date against global banks for breaking AML (anti-money laundering) rules and sanctions violations are the tip of the iceberg, according to Data-as-a-Service provider, Anomaly42.

Anomaly42, a specialist in identifying money laundering activity via Big Data analysis, says the use by legislators and regulators globally of technology to scan for financial crime is set to expose countless other banks involved in money laundering activity — and result in fines of up to £250bn by 2020.

Big Data platforms automate the search for money laundering activity and are able to identify all banks involved in criminal transactions, at whatever level. Essentially, as one bank is investigated using Big Data technology, evidence is gained by the authorities on all the other banks implicated in that specific data ecosystem.

In an effort to stem the tide of fines, banks globally are employing armies of compliance officers to counter the rising threat of money laundering, which is estimated at between US$1.44 trillion and US$3.59 trillion annually.However, attempting to do so manually is not just limited in scope but a significant drain on resources. The front office of banks is increasingly losing out to the back office, posing not just a reputational, but a major commercial, threat.

Freddie McMahon, Director of Strategy and Innovation at Anomaly42, commented:
“The gargantuan fines levied against banks to date are merely the tip of the iceberg. Technology today is laying bare complex money-laundering ecosystems in a way that was never possible previously. Once legislators and regulators have dealt with one bank, they are moving onto the other banks embroiled in these ecosystems, even if unknowingly. It’s only a matter of time before more major banks receive sizeable fines.

“The top banks are starting to understand that the rules of the game have changed, that the simplistic money laundering ring is a thing of the past. But the vast majority are still blissfully unaware of the storm that is coming their way. The fines currently being levied against banks are set to be the new norm in global banking, and our research suggests exposure of up to £250bn in the next six years.”