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The Wall Street Journal reports that “lapses in anti-money-laundering and financial-crimes controls are more likely to affect a bank’s credit rating than almost any other nonfinancial factor, according to Fitch Group Inc”.

The article by Kristin Broughton summarises the findings of a study from the credit-ratings firm, published on Thursday, May 9th. The objective was to analyse the “impact that environmental, social and governance factors have on issuer credit scores”, including energy management, labour relations, and management strategy, among others.

Monsur Hussain, senior director in the financial institutions’ group at Fitch, said in an interview that “financial crimes compliance lapses can be serious, material and can drive credit ratings”. He also added that “anti-money-laundering controls are playing a bigger role in credit ratings because regulators across the globe are cracking down on banks with weak controls“.

The negative impact on a bank’s credit ratings is just the latest addition to the list of potential consequences of poor AML compliance for financial institutions.

At Know Your Customer, we specialise in providing highly sophisticated and dynamic solutions for financial institutions looking to strengthen their customer on-boarding and AML compliance process through a secure digital solution. To learn more, request a consultation today.

Last updated on May 9th, 2023 at 08:43 pm

Claus Christensen

Claus Christensen is the CEO & Co-Founder of Know Your Customer. His vast array of previous experiences includes founding a technology company that develops email server infrastructure products for 60,000+ global customers and serving as VP Electronics at Thielert Aircraft Engines. A regular contributor to leading industry publications and a recognised expert in the anti-money laundering and financial regulation space, Claus is also the host of the RegTalks podcast and a senior lecturer of the Centre for Finance, Technology and Entrepreneurship (CFTE)’s RegTech Course.