Under pressure: where will regulators look next?

Post-crisis, regulators worldwide were relentless in overhauling conduct control in banks. A decade on, the pressure is just as intense, the focus is just changing. 

After the crisis, regulators set about changing the face of banking. It would be naïve to assume that banks would have instituted the provisions to better control conduct to this extent, and improve management accountability, had they not been so instructed. 

Banks might, of course, be forgiven for sometimes wishing regulators would have eased up a little over the last few years. The pace of regulation, new rules, new initiatives and shifts in posture has been relentless for the last decade. 

This has also been reflected in the levels of enforcement over the last 10 years. Regulators in the USA and Europe have imposed about $340bn in fines upon banks since 2009, according to some estimates. In the last 12 months, three banks in particular received some of the largest fines.

The Royal Bank of Scotland finally settled the Department of Justice historical investigation into sales of mortgage-backed securities for $4.9bn (making RBS’s total penalties since the crisis an eye-watering $27bn), while Wells Fargo was fined $2.09bn to settle similar claims in the years running up to the crisis. It has also agreed to pay an additional $575m to all 50 states as a result of its notorious fake accounts scandal. 

And in April 2019, Standard Chartered was hit by a $1.1bn from US and UK authorities for money laundering violations and for breaching trading sanctions with various countries including Iran. The hits keep coming. 

No time to relax
But any bank hoping for an easing of scrutiny from regulators are heading for disappointment, according to the majority of those polled in the 2019 1LoD survey. In the next 12 months, 38% expect even more fines and enforcement actions than occurred in 2018, while 41% expect around the same level of fines and enforcement as over the last year. Only a fifth (21%) anticipate that the pressure will drop off in the next 12 months. Tellingly, no firm says that they are looking to hire fewer controls professionals with regulatory experience. 

John Baskott

Welcome to 1LoD's Global Benchmarking Survey and Annual Report 2019, the largest and most comprehensive survey ever conducted on the front office control sector. This year's report was answered by over 30 of the world’s largest financial institutions. We hope you enjoy reading the findings and thank you to everyone who contributed to making it a success. To find out more about upcoming events, our careers hub or other content from 1LoD just visit www.1lod.com

John Baskott, Co-Founder, 1LoD

Lead sponsors




Partner sponsors

Digital Reasoning


Researched and published by