Launchpad Capital’s Post

happy #fintech Friday! Monzo Bank, a U.K. digital bank, denied Chancellor of the Exchequer Jeremey Hunt’s account application. He explained to the Financial Times his status as a public official flagged him as a “politically exposed person” (PEP). His point: Over-rigous #AML rules meant to catch corrupt bribe-takers could instead deter good candidates from public service. Our point: #Regtech should deliver more accurate results—not just throw more bales on the haystack when we’re looking for the needle. Drawing a connection: The SEC just fined Merrill Lynch (and its Bank of America holding company) for failing to file about 1,500 SARs. Yes, a major financial institution’s #compliance function should be using the correct transaction threshold ($5,000 not $25,000). But tell us: What percentage of those would-have-been SARs would have stopped financial crime or led to arrests? Our best guess is zero to none. And where was #FinCEN in all of this? Buried in SARs. They didn’t need a larger pile. In our very complex regulatory structure the SEC and FINRA made the charges and will receive the fines. That $12 million penalty should instead go toward tech to help FinCEN make better use of the effort banks put into #BSA/AML compliance. Related: Treasury appointed Andrea Gacki as the new FinCEN director (replacing an acting director). Yellen says Gacki “expertly deploys Treasury’s financial tools.” #neobanks https://lnkd.in/e432PP6X