Under high surveillance:
from record fines to regulatory transformation
The financial services sector is under unprecedented regulatory pressure. From anti-
money laundering (AML) to sanctions compliance, data protection, and ESG
disclosure, institutions face intense scrutiny from both domestic and extraterritorial
regulators (e.g., OFAC, FCPA, AMLD6, CSRD). Non-financial risks are no longer
peripheral: they’re central to operational resilience and market access.
Key Risks
Anti-Money Laundering & Terrorist Financing (AML/CTF)
In 2024, **TD Bank** agreed to pay a record **$3.1 billion USD** to settle violations related to systemic AML failures, including blind spots in transaction monitoring connected to drug cartels.
In 2023, **Binance** paid **$4.3 billion USD** for similar deficiencies, including failure to implement Know Your Customer (KYC) procedures.
International Sanctions Violations
The most emblematic case remains **BNP Paribas**, fined **$8.9 billion USD** in 2014 for facilitating transactions with Iran, Sudan, and Cuba in breach of U.S. sanctions.
Cybersecurity Breaches & Data Leaks
Financial institutions are top targets for cybercrime. The average breach cost is **$4.45 million USD** (IBM 2023). **Equifax** paid **$1.4 billion USD** after a 2017 breach affecting 147 million customers.
.avif)
Conflicts of Interest & Insider Trading
Although not always central actors, insurers are often entangled in complex structures involving sanctioned entities or high-risk jurisdictions.
In 2019, UniCredit paid $1.3 billion USD to resolve U.S. sanctions violations including transactions involving clients in Iran and Sudan even though the primary business was banking, not insurance.
Sector Trends
Rise of RegTech
Artificial intelligence and blockchain are widely used to automate KYC/AML processes and risk scoring.
ESG Pressure from Investors
With more than **$41 trillion USD** in ESG-linked assets under management (2023), financial institutions must prove compliance with sustainability and social responsibility standards.
EU Regulatory Evolution
The **CSRD** directive requires over 50,000 companies, including financial institutions, to publish detailed non-financial disclosures by 2025.
What This Means for Your Business:
This is a sector where **fines reach billions**, and **zero tolerance** is the norm.
Proactive management of non-financial risks is no longer a competitive advantage — it’s a **precondition for market access**.
Regulatory, reputational, and operational risks are tightly intertwined — and increasingly personal for executives.
Sources
U.S. Department of Justice, “Binance Agrees to Pay $4.3 Billion,” Nov. 2023
FinCEN, “TD Bank Settlement for AML Failures,” 2024
U.S. Department of Justice, “BNP Paribas Sanctions Settlement,” 2014
IBM Security, “Cost of a Data Breach Report,” 2023
U.S. Securities and Exchange Commission, “Rio Tinto Insider Trading Case,” 2021
European Commission, Corporate Sustainability Reporting Directive (CSRD), 2022
Financial Times, “The Rise of RegTech,” April 2023