Regulatory intelligence solutions provider Vixio has released its European Enforcement Report for H1 2024, analysing enforcement actions in the UK and EU using Vixio’s proprietary ‘Horizon Scanning Tool’ and ‘Enforcement Tracking’ function.
Over the first half of 2024, a total of 67 enforcement actions were tracked in the jurisdictions covered by the report, with more than half of enforcement activity (54%) targeting AML failings. In 84% of cases, enforcement actions were financial penalties, and 49% of fines were issued to banking entities.
According to Vixio analysts, AML is often a priority for regulators, but the high level of AML enforcement could also be attributed to the EU’s ongoing AML reforms, including the establishment of a new AML authority, which will be based in Frankfurt.
“We are seeing a significant focus on AML compliance from regulators across the EU and UK, and this trend is only set to intensify with the establishment of the new AML authority in Frankfurt,” said Roseanne Spagnuolo, chief content officer at Vixio.
“Our report highlights the increasing scrutiny financial institutions face, especially in the banking sector, and underscores the importance of robust compliance measures. With enforcement activity concentrated in areas like AML, data protection and business conduct, it’s clear that organisations need to be more vigilant than ever.”
Additionally, the report found that Eastern Europe was the most active region in enforcement in the first half of 2024.
Lithuania was identified as the most active jurisdiction in enforcing violations, with nearly 20% of tracked enforcement actions originating in the country. The Bank of Lithuania and the Financial Crimes Investigation Service are the most active authorities issuing fines, with a majority due to AML violations.
The Bank of Lithuania also revoked two licences due to serious AML failings. Lithuania’s tougher approach may be due to its keenness to mature the large payments and e-money industry in the country.
Finally, banks were subjected to the most enforcement actions, accounting for more than half of the enforcement cases in H1 2024. In the euro area, banks were hit with penalties totalling €38 million.
“Given that banks outnumber other payment entities in the EU and UK, this is not necessarily surprising. However, the banking sector is also long established, so organisations should have a clear sense of the regulations they are subject to,” said John Gidla, head of payments compliance at Vixio.
“The key takeaway from this report is the importance of payments businesses of any size and type to not only stay ahead of regulatory changes, but also proactively assess potential gaps in their current risk management processes. With the right tools, like Vixio Horizon Scanning, payments firms can better anticipate trends and mitigate risks, reducing the likelihood of regulatory enforcement actions.”
‘Enforcement Tracking’ is a feature of Vixio’s ‘Payments Compliance Horizon Scanning’ offering. It provides updates to clients’ inboxes on enforcement actions by EU and UK regulators on companies that violate regulations in areas such as AML, data protection, conduct of business, anti-trust, prudential standards, advertising, and others.
‘Enforcement Tracking’ covers the latest updates on financial penalties, including warnings, licence revocations, remedial actions, and restrictive orders, helping organisations to identify and mitigate risk.
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