The provider of financial software and technology said in a Monday (April 21) press release that these new solutions are powered by Dataseers, a B2B software-as-a-service (SaaS) company specializing in tools for risk, fraud, compliance and operations.

The solution that was launched Monday, TruDetect, provides templates for suspicious activity report (SAR) and currency transaction report (CTR) narratives; customer behavior dashboards; tailored user roles, workflowsand alerts; and AI-powered risk confidence scoring, according to the release. It can be integrated into any core banking system.

“TrueDetect seamlessly integrates into any bank’s compliance team, instantly providing support and AML protection that causes no disruptions to the customer experience,” CSI Chief Risk and Information Security Officer Steve Sanders said in the release.

The solutions that will be rolled out later this year are called TrueProtect and will monitor for malicious account takeovers in addition to suspicious P2P, ACH, wire and card activity, per the release.

“With TruProtect, we’re putting AI-powered prevention measures within reach for community banks, helping them stay one step ahead of bad actors without requiring specialized technical expertise or massive security teams,” Sanders said in the release.

Dataseers founder and CEO Adwait Joshi said in the release that the partnership between the two companies will enable financial institutions to not just react to threats, “but stay steps ahead, delivering trust and excellence at every turn.”

These new solutions are the latest offerings to CSI’s growing product suite.

CSI said in September that it acquired overdraft management software firm Velocity Solutions to help bankers establish controls according to account behavior, giving them access to a real-time dashboard that tracks the health of their overdraft program.

In July, CSI debuted a developer portal for community banks, saying it enables these banks to consider more application programming interfaces (APIs) across account opening, payments, document services and other applications, to onboard new solutions to open new lines of revenue, streamline back-office operations and enhance their engagement with account holders.

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The New York Department of Financial Services (NYDFS) announced the penalty Thursday (April 10), saying it came after the regulator found “significant failures” in Block’s Bank Secrecy Act/anti-money laundering (BSA/AML) compliance program.

“All financial institutions, whether traditional financial services companies or emerging cryptocurrency platforms, must adhere to rigorous standards that protect consumers and the integrity of the financial system,” NYDFS Superintendent Adrienne Harris said in a news release.

“Compliance functions must keep pace with company growth or expansion. The rapid growth of Block’s Cash App absent a robust compliance function created risk and vulnerabilities that violated the rules financial services companies operating in New York must adhere to.”

“Notably, Block’s lax treatment of high-risk Bitcoin transactions allowed largely anonymous transactions to proceed without proper scrutiny,” the release said. “Additionally, Block’s rapid growth between 2019 and 2020 contributed to a severe transaction alert backlog, which Block left unaddressed for a significant period of time.”

Aside from the monetary penalty, Block is required to retain an independent monitor to carry out a comprehensive evaluation of its compliance with NYDFS regulations. The department said Block cooperated with the investigation and has “already committed significant financial and other resources” to remediate the issues identified by the investigation.

“Block did not admit to any of the department’s findings, and we are pleased to put this matter behind us,” the company said in a statement provided to PYMNTS. “We share the department’s dedication to addressing industry challenges and remain committed to investing across our operations to help promote a safe and healthy financial system.”

The company published a statement on its website Thursday that — while not mentioning the investigation — outlined Cash App’s compliance efforts, which include a bitcoin monitoring program featuring things like “enhanced due diligence” and real-time transaction blocking.

“This is an enduring effort,” the company said. “We are committed to continued investment in safety, and full compliance with both the letter and the spirit of the law as our program continually evolves.”

The NYDFS action comes amid calls for updates to federal anti-money laundering (AML), rules, the subject of a recent House Financial Services Committee hearing.

Darrin McLaughlin, executive vice president and chief AML and sanctions officer for Flagstar Bank, testified before the committee on behalf of the American Bankers Association.

“We need a strategic approach” that includes the banking sector, the government and other stakeholders, he said, and that “regulatory reforms let us focus on the real threat.”

Banks have embraced AML compliance and anti-fraud programs, he said, to identify anomalous patterns of fund flows. However, McLaughlin noted an issue with the suspicious activity reports (SARs) that banks are required to file.

“By the time law enforcement receives the reports, it is often too late,” he said, adding that the “federal government has a database that is bursting with information that should be shared with the private sector.”

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As part of the plea, Aux Cayes FinTech — doing business as OKX — will pay more than $504 million in fines and fees, the U.S. Department of Justice said Monday (Feb. 24).

“For over seven years, OKX knowingly violated anti-money laundering laws and avoided implementing required policies to prevent criminals from abusing our financial system,” Acting U.S. Attorney Matthew Podolsky said in a news release.

“As a result, OKX was used to facilitate over five billion dollars’ worth of suspicious transactions and criminal proceeds.”

OKX, one of the world’s largest crypto exchanges, had been accused of violating its own policy of allowing people in the U.S. trade on its platform. Prosecutors also said the platform was used to carry out more than $5 billion of suspicious transactions and criminal proceeds.

And even after the company began requiring customers to provide know-your-customer (KYC) information to trade, prosecutors say employees would advise users on how to give false information to get around the KYC process and the prohibition on U.S. users.

In one instance, the release said, an OKX employee encouraged a potential U.S. customer to open an account by providing false information about their nationality: “I know you’re in the US, but you could just put a random country and it should go through. You just need to put Name, nationality, and ID number. You could just put the United Arab Emirates and random numbers for the ID number.”

In a statement issued following the plea, OKX said the improper trades by American customers were the result of “legacy compliance gaps,” adding that these customers are no longer part of the platform, and had been a small slice of its overall user base.

The plea comes as other crypto exchanges are seeing U.S. government legal action against them go away.

For example, the financial platform Robinhood announced earlier this week that the Securities and Exchange Commission (SEC) had concluded an investigation into its crypto exchange and had no plans to follow up with enforcement action.

Days earlier, another crypto firm, Coinbase, announced that the SEC was preparing to dismiss its 2023 lawsuit against the company.

“This would be a full dismissal, with $0 in fines paid and zero changes to our business,” CEO Brian Armstrong wrote in a post on social platform X.

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BGS USA reached a non-prosecution agreement with the Department of Justice (DOJ) and a consent order imposing civil money penalty with the Financial Crimes Enforcement Network (FinCEN), the company said in a press release.

Brink’s said in the release that it agreed to pay a total of $42 million over three years and that it cooperated throughout the investigations. The company added that the resolutions involve currency shipments that occurred from 2018 to 2020 and that it strengthened its global Ethics & Compliance program over the last several years.

“Upon learning of the DOJ investigation in 2020, we conducted our own thorough internal review and have since implemented further enhancements to our global Ethics & Compliance program, which were acknowledged by the DOJ in our agreement,” Brink’s President and CEO Mark Eubanks said in the release. “As an industry leader, we are committed to continuous improvement and are always evolving our program to address changing compliance risks.”

FinCEN said in a Thursday press release that it assessed a $37 million civil money penalty against BGS USA for willful violation of the anti-money laundering (AML) law, the Bank Secrecy Act (BSA), and that the company will be subject to an AML program review.

The agency said that the resolution with BGS USA sets forth that the company failed to register with FinCEN as a money services business, failed to develop an effective AML program, and failed to file suspicious activity reports.

“For years, Brink’s moved large sums domestically and across the Southwest border without required AML controls, exposing the U.S. financial system to a heightened risk of money laundering, including from narcotics trafficking and other illicit activity,” FinCEN Director Andrea Gacki said in the release.

The DOJ said in a Thursday press release that BGS USA would forfeit $50 million to settle criminal allegations that it operated as an unlicensed money transmitting business and that, as part of the non-prosecution agreement, the company admitted that it illegally transported money domestically and internationally.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.

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The suit against the FDIC also states that the government agency’s structure and actions were and are unconstitutional.

In an action disclosed by the FDIC at the end of December and issued to the Kansas bank on Nov. 19, the FDIC charged that CBW “failed to maintain an adequate anti-money laundering/Countering the Financing of Terrorism” program while “recklessly engaged in unsafe or unsound practices” that were allegedly tied to repeated violations of the Bank Secrecy Act.

Focusing on AML/CFT

During the period cited in the FDIC suit, from 2018 to 2020, CBW operated a “multibillion dollar international monetary transfer business,” and generated the bulk of its fee-based revenues from correspondent banking services for international financial institutions (FIs) based outside the United States. Services included, among others, cross-border remote deposit capture services for checks and high-volume electronic funds transfers. The complaint alleges that CBW failed to file “hundreds” of suspicious activity reports and lacked appropriate customer due diligence practices. 

“Due to the failures described above, Respondent earned millions in fee income that it otherwise would not have earned if it had maintained an adequate AML/CFT compliance program,” the FDIC said in the filing, as the bank processed billions of dollars in transactions. 

In one example listed in the FDIC document, an unnamed CBW customer wired “over 70% of its bulk cash funds to accounts” at a different foreign FI based in Grand Cayman; CBW’s processes allegedly failed to review or flag those transactions.  Subsequent reviews in 2022 and 2023 found, per the FDIC’s order, that many of the deficiencies cited remained uncorrected.

The Response

CBW, for its part, filed its own complaint in Kansas in November, where the bank said that the penalty “is unreasonable and unprecedented for a bank of this size, complexity, and supervisory history. There is no justifiable basis for any CMP [civil monetary penalties], let alone for one of this magnitude given the conduct at issue in this case.” 

The bank also stated in its suit that the CMP was levied “for years-old conduct that occurred in the long-abandoned correspondent banking and money services businesses.” In 2020, CBW entered into a consent order with the FDIC that shut down those businesses.

The most recent suit also charged that the “FDIC seeks to impose civil monetary penalties in an amount it is aware will consume substantial amounts of the bank’s capital and harm its reputation.”

CBW said in the suit that the action by the FDIC is unconstitutional because administrative proceedings “unconstitutionally deprives CBW of its Seventh Amendment jury rights,” adding that the process subjects the bank “to an administrative proceeding presided over by an executive officer unconstitutionally insulated from presidential control.”

Reached for comment on Wednesday, the FDIC referred PYMNTS back to the orders, and a spokesperson stated that the “FDIC lets the orders speak for themselves.”

The actions come at a time, as PYMNTS Intelligence has reported, as many as 7 in 10 FIs have turned to artificial intelligence and machine learning to combat fraud. Separately, there has been some anticipation ahead of the incoming presidential administration the the very structure of several regulatory agencies — including the FDIC — may be reconfigured.

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The company was placed into administration — a type of insolvency procedure — earlier this month after a reference to it appeared in a U.S. indictment in a money laundering case, the Financial Times reported, citing sources familiar with the matter.

The sources said that reference led Stenn’s lenders, including banking giant HSBC, to begin examining potentially suspicious transactions. Stenn — which had at one point been valued at $900 million — specialized in invoice financing for small and medium-sized businesses.

Sources told the FT that HSBC began investigating potentially suspicious transactions at London-based Stenn earlier this year after American prosecutors unsealed an indictment that included passing references to Stenn and its founder and CEO Greg Karpovsky. Neither Stenn nor Karpovsky were accused of wrongdoing in that case, the report adds.

However, the references to them in the indictment were enough for HSBC to investigate further, uncovering potentially suspicious transactions, the sources said.

Karpovsky told the FT that he was “cooperating” with Stenn’s administrators and that it “would not be appropriate” to speak about that process.

“However, I am obviously concerned about any allegations of impropriety against me and I deny any wrongdoing in connection with Stenn,” he said.

The FT report notes that the company’s collapse is likely to spotlight the due diligence of its banking partners and investors, considering that Stenn’s former auditor had resigned due to concerns about some transactions, and Karpovsky had also been involved in an invoice finance company in Russia that later imploded amid allegations of fraud.

The news comes at a time when anti-money laundering (AML) controls are “emerging not merely as a regulatory obligation but as a strategic priority for the year ahead,” as PYMNTS wrote last week.

As technology makes financial services faster and more accessible, the threat of financial crimes is rising, and regulators are demanding more vigilance.

“Against this backdrop, AML, which has traditionally been viewed as a cost center — a necessary burden to satisfy regulators — is becoming a cornerstone of competitive differentiation for financial institutions (FIs) in an era where trust is increasingly a marketable asset,” PYMNTS wrote.

Recent weeks and months have seen several FIs take measures to improve their AML measures, typically at the behest of regulators. For example, Wise updated its controls on the recommendation of a European regulator, while TD Bank is working on its risk controls as ordered by the U.S. government.

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With the news that Wise, the money transfer giant, has implemented a European regulator’s recommendations to bolster its AML programs, AML is emerging not merely as a regulatory obligation but as a strategic priority for the year ahead.

Particularly as financial services become increasingly faster and more accessible through technology, the risks of financial crimes are growing just as quickly, and regulators are demanding heightened vigilance.

Against this backdrop, AML which has traditionally been viewed as a cost center — a necessary burden to satisfy regulators — is becoming a cornerstone of competitive differentiation for financial institutions (FIs) in an era where trust is increasingly a marketable asset.

After all, Wise is far from alone. TD Bank reportedly is working to select compliance monitors to track its progress on risk and controls and report to regulators, as ordered by the U.S. government in October; while the U.S. Office of the Comptroller of the Currency (OCC) this past September signed a formal agreement with Wells Fargo to rectify deficiencies in its anti-money laundering (AML) and financial crimes risk management practices.

As a result of its past compliance failures, TD Bank is expected to pay a roughly $3 billion penalty and agree to limits on its growth in the U.S. And government agencies are reportedly also investigating Citigroup’s AML policies and its ties to a sanctioned Russian official.

With 2025 approaching, among the best ways for businesses to avoid penalties that erode both the bottom line and end-user trust is to embrace a proactive approach to AML/KYC. And next-generation technologies and artificial intelligence (AI) tools can help financial institutions detect and prevent AML anomalies better and faster than they ever could before.

Read more: Surging Business Innovation Puts Compliance Role at Center of Growth

The Expanding Scope of AML and Its Impact on Business

AML is no longer just about keeping a banking license but about protecting customers, reputations and the ability to innovate. FIs that don’t invest in sophisticated AML frameworks can face the risk of falling behind not only in compliance but in their ability to serve customers effectively.

The U.S., for example, has indicated that combatting financial crime will remain a bipartisan priority under the incoming Trump administration. And, of course, it isn’t just the U.S. where AML is grabbing headlines. In November, the United Kingdom’s finance regulator fined Metro Bank $21 million for failing to monitor AML risks.

This regulatory intensity coincides with a wave of technological innovation. Manual processes are no match for the speed and scale of modern financial crime, but AI and machine learning are playing an increasingly central role in AML, enabling FIs to sift through vast amounts of transaction data to identify anomalies in real time.

Seven in 10 FIs are now using AI and machine learning to fend off bad actors, according to the PYMNTS Intelligence and Hawk collaboration, “Financial Institutions Revamping Technologies to Fight Financial Crimes.”

In July, Wolfgang Berner, co-founder and CPO of Hawk, unpacked for PYMNTS the opportunities that large transaction models (LTMs) — generative AI models adapted to financial crime — represent in establishing more robust, accurate and comprehensive detection and prevention mechanisms.

“LTMs see transactions in their entirety without aggregation, maintaining a broad view and understanding language data within transactions, such as reference texts indicating intent,” Berner said.

See also: Partner-Bank POV: Why Third-Party Risk Standards Power Cross-Border Payments

AML and the Financial System of the Future

As PYMNTS’ Karen Webster wrote at the start of September, regulators aren’t shy now about aggressively examining and sanctioning FinTechs and FinTech models. Banks and payments ecosystems reassess FinTech partnerships. Sponsor banks turn down more deals and take longer to look at the ones that they’ll OK in the end.

Looking ahead, AML systems must no longer operate in silos. Integrating these systems with fraud detection, know-your-customer (KYC) and other compliance tools can help to create a unified defense against financial crime.

PYMNTS Intelligence shows that end-user expectations are evolving. The report “Progress and Protection: Balancing Convenience and Security in Digital Banking,” done in collaboration with NCR Voyix, found that 69% prioritize fraud and financial crime protection when selecting a financial institution, with nearly a third (32%) considering this the most critical factor in their decision-making.

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FinTech Wise reportedly has implemented a European regulator’s recommendations to bolster its anti-money laundering (AML) programs.

Wise was forced into a formal remediation plan after the National Bank of Belgium found in 2022 that there was a shortcoming in its AML controls, the Financial Times (FT) reported Thursday (Nov. 28).

The National Bank of Belgium supervises the London-listed FinTech in Europe and determined that Wise lacked proof of address for hundreds of thousands of customers, according to the report.

Wise told the FT: “In 2021, the National Bank of Belgium carried out a routine review of Wise Europe as part of a marketwide exercise in the wake of Brexit. We worked closely with our regulator in Belgium and have fully implemented their recommendations.”

Under a remediation plan developed by the FinTech and approved by the regulator, Wise was required to contact all the customers to request their proof of address and to freeze the accounts of those who did not do so in time, according to the report.

The company bolstered its anti-crime staff with customer service staff, per the report.

Wise said in the report that one-third of its global team is now dedicated to fighting financial crime and maintaining compliance.

Wise was known as TransferWise until rebranding in February 2021. Wise said at the time that the name change reflected the broader change of the company beyond its original roots as a money transfer company.

In August 2022, the firm was fined $360,000 in Abu Dhabi for violating AML regulations, with the Abu Dhabi Global Market’s Financial Services Regulatory Authority (FSRA) saying at the time in a statement that it “found that Wise did not establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations.”

A Wise spokesperson told PYMNTS at the time that the company takes its responsibility to protect its customers and prevent money laundering seriously, noting that it had worked with the FSRA and neither the company nor the authority found instances of money laundering or any financial crime.

Today, Wise maintains more than 65 regulatory licenses around the world, according to the Thursday FT report.

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The Department of Justice (DOJ), the FBI and the IRS are looking at the bank’s work for a trust that holds assets owned by Russian billionaire Suleiman Abusaidovich Kerimov, Bloomberg reported Thursday (Nov. 14), citing unnamed sources.

A Citigroup spokesperson told Bloomberg: “Citi is committed to conducting all business with the highest consideration for compliance with all applicable laws and regulations. At the same time, we are actively ending nearly all of our institutional banking business in Russian, except for those operations necessary to fulfill remaining legal and regulatory obligations, while we proceed with the closing of our Russian consumer banking business.”

During an Oct. 15 earnings call, Citigroup CEO Jane Fraser spotlighted the company’s continuing transformation process by noting that the company recently closed a longstanding consent order tied to its anti-money laundering systems.

“We have increased our investments in areas where we have not made sufficient progress, such as data quality management,” Fraser said. “I and the management team remain steadfast and determined to get this transformation right and to get this done.”

The Federal Reserve announced Oct. 1 that it terminated its decade-old enforcement action against Citigroup that was focused on deficiencies tied to the banking giant’s anti-money laundering practices.

In the 2013 documentation of the consent order, the Fed said that Citigroup had “adopted a firmwide compliance risk management program designed to identify and manage compliance risks across the consolidated organization related to compliance with all applicable laws, rules and regulations,” and that the consent order did not constitute an admission or denial of the allegations made as part of the enforcement action.

There is growing scrutiny on anti-money laundering efforts, highlighted by enforcement actions and fines from regulators when banks, FinTechs and other firms are deemed to come up short, PYMNTS reported in July.

At the same time, the rules governing anti-money laundering and fraud-fighting efforts may change, as regulators seek input on the use of advanced technologies to sharpen fraud defenses at financial institutions.

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The Financial Conduct Authority said Metro must pay 16.7 million pounds (about $21 million) for a lack of proper money laundering protections on 60 million transactions between 2016 and 2020, according to a Tuesday (Nov. 12) press release.

“Metro’s failings risked a gap being left in our defense against the criminal misuse of our financial system,” Therese Chambers, the FCA’s joint executive director of enforcement and market oversight, said in the release. “Those failings went on for too long.”

Metro automated the monitoring of transactions for financial crime in June 2016, although the system did not work as planned, per the release.

Because of an error in how data was inputted into the system, transactions taking place on the day an account was opened — and any other transactions until the account record was updated — were not tracked, the release said. While staff raised concerns about the issue in 2017 and 2018, the problem was not fixed.

When a fix was found in July 2019, Metro didn’t have a way to consistently determine that relevant transactions were added to the monitoring system until December 2020, according to the release.

Metro Bank issued a statement Tuesday saying that it accepts the FCA’s findings and has cooperated with the regulator’s investigation.

“The conclusion of these inquiries draws a line under this legacy issue, allowing the bank to move forward and fully focus on the future, building on the solid foundations it has already laid,” Metro CEO Daniel Frumkin said in the statement.

The bank added that since 2020 it has “resolved transaction monitoring system failings and made transaction monitoring enhancements.”

As PYMNTS wrote earlier this year: “Enforcement actions and fines from regulators … highlight the growing scrutiny on anti-money laundering (AML) efforts.”

Last month, for example, the U.S. federal government issued a $3 billion penalty to TD Bank for its AML failures.

Also last month, the FCA fined Starling Bank 29 million pounds related to its financial crime controls, which the regulator called “shockingly lax.”

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