Lax controls in crypto and fintech companies resulted in global fines of $5.8bn last year, eclipsing fines to the entire traditional banking system by a considerable amount.
According to fintech software leader
Fenergo, fines in the traditional banking group amounted to $834m comparatively.
Of that $5.8bn sum, $4.3bn was the
well-reported US criminal charges on Binance, it is still a large difference between traditional and newer banking systems.
Because of this, the Cayman Islands, where Binance is headquartered, saw the largest regional increase of fines – up from $3m in 2022 to over $4.5bn in 2023. The US and China also saw significant increases.
Loose practices in crypto and fintech have been cited as the reason behind these high figures, especially anti-money laundering (AML), know your customer/client (KYC), environmental, social, and governance (ESG) and sanctions and customer diligence (CDD)
breaches.
Collaborative approach
Globally, tighter regulation is being called for. However, the UK is bucking the trend. Here, regulators issued fines for $25.26 million in total – a decrease of 86%.
There are a number of reasons for this. From fintech sandboxes to collaboration with policymakers in other countries, the UK’s Financial Conduct Authority (FCA) is no stranger to pilot projects around regulatory technology.
In the UK, there is more of a collaborative and proactive approach to regulation, and the future of regtech is being shaped by regulators and the private sector working together.
As fintechs continue to innovate at a rapid pace, regtech will continue to play a crucial role in militating regulatory risks. By streamlining processes and integrating advanced analytics, AI and blockchain technologies, the future of compliance is automated,
and this is where job creation is expected to grow.
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Compliance Analyst, Goldman Sachs, Birmingham
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Senior Calculations Analyst, Optima UK, Remote
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MLRO & Compliance Lead, Plaid, London
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This individual will be the Money Laundering Reporting Officer (MLRO) for the UK, be part of Plaid’s UK Board of Directors, and be the Compliance Lead for the EU. You will need experience working in a regulated fintech environment, plus deep understanding
of Payment Services Regulations, Electronic Money Regulations, and AML/CTF regulations in the UK and Europe. If you have a proven record in building compliance programmes that take a risk-based approach, strong analytical, organisational and communication
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