Standard Chartered has been fined $300 million (£180 million) by the New York State Department of Financial Services (DFS) over deficiencies with its transaction surveillance software, part of anti-money laundering systems and controls.
The settlement comes two years after Standard Chartered was given a $340 million penalty for breaking US sanctions by hiding $250 billion (£148bn) of transactions to the Iran government, leading to a remediation programme with the DFS.
The latest fine follows a review of the lender’s transaction monitoring systems, which found that the software failed to detect millions of high risk transactions originating from its Hong Kong subsidiary and branches in the United Arab Emirates.
“If a bank fails to live up to its commitments, there should be consequences,” said Benjamin Lawsky, superintendent of the DFS. “That is particularly true in an area as serious as anti-money-laundering compliance, which is vital to helping prevent terrorism and vile human rights abuses."
Most banks rely on anti-money laundering (AML) technology to monitor and detect suspicious transactions made through their business, helping to prevent funding of criminal or ‘terrorist’ organisations.
Standard Chartered told ComputerworldUK that the majority of the “most immediate technical issues” with its AML systems have now been addressed. However it will conduct broader enhancements, which will include tuning, testing and systems upgrades.
“The Group accepts responsibility for and regrets the deficiencies in the anti-money laundering transaction surveillance system at its New York branch,” a statement from the bank read.
“The Group has already begun extensive remediation efforts and is committed to completing these with utmost urgency."
The bank is based in London but does most of its business in Asia, Africa and the Middle East.