"Lapses in anti-money laundering and financial crimes controls are more likely to affect a banks’ credit rating than almost any other non-financial factor..."
We often approach the "carrot & stick" motivations for pursuing financial crime prevention in the context of reputational, financial, compliance, legal and operational risk. The other related twist is the credit risk connected to heavy fines and organizational chaos that depletes operating capital and ability to invest in growth.
An estimated $2-4 trillion is attributed to financial crime flows each year globally, and businesses spend, on average, 10-15 percent of their operating costs on compliance. Increasing that percentage due to regulatory action doesn't bode well for organizational effectiveness.
A&M's Financial Crimes Monitoring & Investigations Center leverages a history of operational excellence alongside cost-efficient, effective resources to mitigate risk and lower costs for our clients. http://bit.ly/2Es1PRc
“Financial crimes compliance lapses can be serious, material and can drive credit ratings,” Monsur Hussain, senior director in the financial institutions group at Fitch, said in an interview. Anti-money-laundering controls are playing a bigger role in credit ratings because regulators across the globe are cracking down on banks with weak controls, Mr. Hussain said. “We see a pattern of supervisory activity and muscular enforcement in Western Europe and in Asia,” Mr. Hussain said. He added that U.S. regulators have adopted a zero-tolerance approach to money-laundering regulations, and banks have largely adhered. The findings follow a string of investigations related to possible Russian money-laundering at European banks. In its report, Fitch pointed to negative ratings actions it has taken in recent months related to what it described as weaknesses in risk management and the potential for regulatory fines.