◼ FINANCE27JASPER JUIENEN/BLOOMBERG
THE BOTTOM LINE With ever-tighter oversight and fines topping
$20 billion, banks are cracking down on dirty money—and creating
thousands of jobs in the process.economy squeezing profits, bulking up is tough, but
banks have little choice. In January new European
Union anti-money-laundering regulations will come
into effect, tightening rules and expanding the
range of activities that must be examined. Danske
Bank AS, which says as much as $220 billion in sus-
picious transactions moved through its Estonian
branch, needs 600 people to staff its crime and
compliance units. ING Groep NV, which in 2018
paid a €775 million ($860 million) penalty to settle
money laundering cases, in the second quarter of
this year created 500 full-time positions to mon-
itor suspicious transactions—a 20% rise. France’s
biggest lender, BNP ParibasSA, has increased its
compliance and anti-financial-crime head count by
40%, to 4,200, over the past three years.
Several lenders have farmed out lower-level jobs
in the field to Eastern Europe. Others are holding
“date nights,” where compliance executives meet
with potential hires, seeking to spiff up the image
of what’s long been viewed as a fusty backwater
of the finance industry. Rabobank Group, which
has agreed to pay $369 million to end a U.S. inves-
tigation of money laundering for Mexican drug
cartels, has opened 21 compliance hubs across the
Netherlands to attract workers reluctant to move
to bigger cities. Deutsche Bank, the troubled lender
that plans to cut 18,000 jobs by 2022, has vowed
it won’t “make any sacrifices” in compliance and
expects to spend €4 billion partly to beef up its
crime-fighting capabilities in the next three years.
Across Europe, salaries for compliance officers
have climbed 20% since 2016, far outpacing raises
in the rest of the banking business, according to
recruiter Korn Ferry.
Although it would be impossible for banks to
comply with money laundering regulations with-
out software, the tools can flood them with thou-
sands of “false positives.” Loosening the algorithms
could reduce that problem, but that would likely
also let some bad guys squeak through—exposing
banks to the risk of massive penalties. Moreover,
criminals are constantly coming up with ways to
hide the provenance of their cash, often using elab-
orate webs of offshore companies or rapidly mov-
ing money around the world using digital payment
transfers and cryptocurrencies. Computers can
spot suspicious activity, but they’re typically not
smart enough to unravel precisely what’s going on
with a client or a transaction.
That’s why banks need people such as Carolien
Al-sabbag. The 29-year-old analyst was hired last
year by Rabobank’s compliance center in Zeist,
a town of 63,000 about 45 minutes south of
Amsterdam by car. On a recent afternoon, she gota notice that a client with a sizable real estate port-
folio had made a series of cash deposits in excess of
€10,000, and the source of the funds was unclear.
After a quick Google search, Al-sabbag discovered
that police had found an illegal pot farm on one
of the customer’s properties. She called the man’s
accountant, who said the client owns a restau-
rant (which she verified with the Dutch Chamber
of Commerce) and that the money was legitimate
revenue from there. She passed her findings on to
a supervisor, who would decide whether to report
the suspicious activity to police. “People aren’t
always happy when we scrutinize them, but with
so many dirty-money scandals, they’re starting to
understand it more,” she says.
Still, simply hiring a bunch of recruits isn’t suffi-
cient, says Charles Delingpole, chief executive offi-
cer of ComplyAdvantage, a London startup that
provides anti-money-laundering software to more
than 400 clients including Banco Santander’s U.K.
division and Earthport, a payments processor
owned by Visa. Lenders are being asked to keep
closer tabs on accounts even as apps let custom-
ers do everything from currency trading to tak-
ing out mortgages with just a few taps on their
smartphone. And every time a bank stops a trans-
action or investigates a client, the business can
go elsewhere.
Delingpole says striking a balance is a serious
challenge requiring a new mindset across the entire
organization, not just more people and software.
“It’s much easier to throw bodies at the problem
than it is to rewire financial infrastructure,” says the
tech veteran of JPMorgan Chase & Co. “But money
launderers are tremendously innovative, and the
range of regulatory demands and the severity of
penalties for transgressions continue to increase.”
�Ruben Munsterman and Edward Robinson◀ Al-sabbag at
Rabobank’s compliance
center in Zeist“People
aren’t always
happy when
we scrutinize
them”