Deutsche Bank Teetering on the Edge of AML Non-Compliance

May 17, 2016

The United Kingdom’s financial regulatory agency, the Financial Conduct Authority (FCA), has found that the British branch of Deutsche Bank has “serious” and “systemic” shortcomings in preventing its accounts from being misused for money laundering, sidestepping international sanctions or financing terrorism.

This criticism comes after the FCA conducted a detailed one-year evaluation of 14 big financial institutions, including Deutsche Bank, which raised concerns because of incomplete documentation, lack of transaction monitoring, and employees being influenced to take actions related to certain clients. A letter from the FCA also stated that “effective senior management and leadership on financial crime had been lacking for a considerable period of time.” Based on the findings of the evaluation, the FCA has now called for a separate independent review, with Deutsche Bank agreeing to cooperate with the FCA as required to successfully reform its financial crime management program.

This is just another hurdle in a string of scandals and AML compliance challenges that Deutsche Bank has faced since 2014, including a USD $258 million fine imposed by New York and U.S. banking regulators for violating sanctions and conducting business within countries such as Syria, Iran and Libya. In this situation, bank employees were found to have purposefully circumvented sanctions by changing information within SWIFT messages (“wire stripping”) and disguising transactions by using anonymous cover messages.

Adding to its growing list of fines, the bank was also hit with an $8.4 million penalty by the Dubai Financial Services Authority (DFSA) for failing to have adequate money laundering controls. While not a large penalty on a global scale, it is significant because it is the largest fine levied by the DFSA, demonstrating that regulators around the globe are resolving to crack down on money laundering.

Following the criticism from the UK’s FCA, Deutsche Bank has stated that it “understands the importance of this issue and are committed to and engaged in fixing it.” To date the bank is still far away from getting a firm grasp on its AML challenges and creating a culture of compliance throughout the institution. The CaseWare AML Compliance solution helps financial institutions overcome these types of AML challenges and meet AML compliance requirements efficiently. To learn how you can put our solution to work for your bank or financial institution, contact us or watch the CaseWare AML Compliance solution video for more information.


About Andrew Simpson:

Andrew Simpson has close to two decades of experience in the information systems audit and security business; specifically data analytics, interrogation and forensics. He is a regular contributor to various auditing conferences and is acknowledged as an expert on continuous controls monitoring and revenue assurance.

Connect:  Andrew Simpson

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