"If you think compliance is expensive : try non-compliance"

"If you think that compliance is expensive : try non-compliance". This famous quote from former US Deputy Attorney General Paul McNulty could have been a perfect introduction to the report issued recently by The Centre for Banking Research (CBR) of the University of London about the outcome of its Conduct Costs Project that analyses the financial consequences of misconduct for twenty of the world’s leading banks, from January 2008 to December 2018.

Next to giving transparency about the level of conduct costs, the CBR report provides some insight into banks’ culture, conduct, competence, and regulatory risks. The definition used for conduct cost is all-encompassing, taking into account the obvious (fines, penalties, damages, settlement) but also more indirect expenses (e.g. litigation costs or loss of certain types of incomes).

In aggregate, between January 2008 and December 2018, the 20 international banks included in the analysis have paid conduct costs in excess of EUR 410 billion.

It is known by all banking leaders and risk managers that conduct risk can impact financial institutions as a whole, as well as financial markets and the global economy : for instance, it has been calculated that 150 billions of fines levied on global banks translates into more than $3 trillions of reduced lending capacity to the real economy.

The CBR report provides an interesting benchmark between the 20 global banks in scope (with ING, Standard Chartered and Santander as best performers), which helps getting some comparison in relative terms in a context that is aiming for absolute excellence.

It also reminds everyone about the importance of ethics and integrity as key success factors in conduct risk prevention. This should help Compliance professionals in making their business case to secure the resources they need, as the return on investing in compliance has never been as high as today.

Read our last news
Read It
October 8, 2020

FinCEN files scandal : food for thought

The publication on September 20 by the International Consortium of Investigative Journalists of information stemming from one of the US anti-money laundering watchdog has created a new wave of outrage around the globe. So what next ?

Read It
October 1, 2020

DAC6 : some clarifications

Articles 326/1-10 of the Belgian tax code on revenues incorporate the DAC6 obligations imposed on tax payers and intermediaries to report certain cross-border tax arrangements that could be used to avoid taxation. Here are some recent developments to take into account.

Read It
September 5, 2020

Recent enforcement actions in Belgium on GDPR

Although rather limited till now in number of cases and amount of fines imposed, it is expected that there will be an acceleration of enforcement actions by the Belgian Data Protection Authority who, like its e.g. UK peer, is deploying its resources to secure GDPR compliance