Are AML Fines a "Rounding Error" for Banks?

In a recent piece published by The Banker, journalist Conrad Quilty-Harper examines why repeated anti-money laundering (AML) penalties may have limited deterrent effect and whether other forms of accountability could do more to change bank behavior. 

Quilty-Harper points to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and its recent $125 million penalty against UBS. Tom Keatinge, Director of the Centre for Finance and Security at the Royal United Services Institute, described the fine as “a rounding error” relative to the bank’s earnings. An analysis of 461 AML-related bank fines since 2010 found repeated enforcement across major institutions, with 38 of the world’s 50 largest banks by Tier 1 capital having faced AML enforcement action and fines over that period.

Mirko Nazzari, co-author of a 2025 study on AML effectiveness, argued that repeated penalties for similar failures raise questions about whether enforcement is producing lasting behavioral change. Both Nazzari and Keatinge pointed to greater personal accountability as a potentially stronger deterrent, particularly where managers benefit from risk-taking while institutions absorb the eventual costs.

Quilty-Harper also considers whether AML effectiveness should be judged less by compliance outputs and more by their impact on financial crime. Keatinge pointed to external monitoring imposed on HSBC following its 2012 AML settlement as an example of an intervention that changed how the bank operated. “The fines are the eye-catching bit of the settlement,” he said. “Often they’re not the only element.”