Fintech News | Fintech Zoom

Banks belatedly realise money laundering is bad

The logo of ING bank is seen at the entrance of the group's main office in Brussels, Belgium, Fintech Zoom

LONDON (Reuters Breakingviews) – Deputy heads must roll – such is ING Groep’s new “get tough” message on anti-money laundering. When the Dutch bank announced its 775 million euro settlement with Dutch prosecutors for persistent AML violations on Sept. 4, the bank insisted that any failures were collective and “not attributable to some individual persons”. A week on, finance chief Koos Timmermans is the main casualty of an eye-catching U-turn.

The logo of ING bank is pictured at the entrance of the group’s main office in Brussels, Belgium September 5, 2017. REUTERS/Francois Lenoir

ING’s change of heart doesn’t quite restore its lost reputation as one of European banking’s good guys, which grew out of being one of the few post-crisis lenders to achieve decent returns and a government-free shareholder register. It has been pushed towards its rethink due to shareholder and political pressure.

The bank has also not disclosed whether Timmermans will face any bonus claw-backs or financial penalties. And even though he was responsible for the domestic bank during most of the era under investigation, 2010-16, as well as being the chief risk officer until late 2011, a really hair shirt approach would have been to part company with Ralph Hamers, CEO since 2013. After all, he presided over around half of the period when Dutch prosecutors found that ING violated laws on preventing dirty money and financing terrorism “structurally and for years”, according to a Reuters report on Sept. 4.

Still, the fact investors are now bothered is key. And Timmermans represents one of the most senior departures for a major European bank on account of AML violations. Deutsche Bank, also investigated for AML problems, merely paid fines and moved on without axing any board members. One imagines that executives at Denmark’s Danske Bank, which is currently investigating tens of billions in suspicious historic transactions at a Baltic subsidiary, will be sleeping less comfortably.

That is arguably how it should be. Critics may snigger at how ING, one of Europe’s biggest fintech spenders, could let seemingly basic AML red lights pass it by. But compliance generally, and AML in particular, still relies on human discretion. ING employees failed to take AML warnings seriously enough. The buck now stops with bosses – not merely banks’ cheque books.

Oliver Smith

Add comment

Advertising