UK regulatory fines slump after pandemic logjam
The amount of fines dished out by the UK’s financial regulators has tumbled by nearly half in the first half of the year as officials catch up with a pandemic backlog, a compliance consultancy said today.
Penalties from regulators in the UK fell by around 45 per cent to just under $18m in the first six months of 2022, down from $32,659,931 this time last year, according to financial crime consultancy Fenergo.
The figures come after data from the Financial Conduct Authority in its annual report last month revealed the lingering impact of the pandemic on its enforcement activity.
While the quantity of investigations stayed flat on the previous year, the timelines of investigations had been stretched from an average of 24.7 months to over 33 months, while the number of cases concluded fell to a five-year low.
An FCA spokesperson told City PM last month “the pandemic and its impact on workplaces had a significant factor on timelines” but it aims to complete investigations within 12 months.
“As with other agencies across the world, we are also dealing with processing increasingly large volumes of digital evidence,” the spokesperson said.
The slowdown in regulatory action has played out globally as penalties plunged 25 per cent, with around $1.6bn in fines issued for non-compliance with Anti-Money Laundering (AML), Environment, Social and Governance (ESG) and data privacy regulations in comparison to $2.11bn the first half of last year, according to Fenergo.
Analysts at Fenergo said covid lockdowns had hit regulators globally.
“The decrease in the value of enforcement actions seen in the first half of this year is a result of a continued backlog from the pandemic,” said Ned Kulakowski, Financial Crime Consultant at Fenergo. “This had a huge impact in the velocity of regulatory investigations.”
North America bucked the trend and notched a major jump in regulatory action however, with the value of financial penalties rising from $701.5m in the first half of the year to $1.5bn in the first half of this year.