Bank regulation gone haywire

Banks are spending $20 billion on compliance in an effort to combat money laundering, yet only one per cent of illicit financial flows are seized by authorities every year. While regulations have been introduced to crack-down on money laundering, so far they have had a limited effect. Given that banks will incur more than $400 billion in fines by 2020, as a result of misconduct and inadequate AML measures, organisations are under pressure to strengthen their own customer due diligence in order to avoid heavy fines.

Here is a clue.

First and foremost, do not charge the honest customers,  let them prequalify and skip the launder checking.  Those not prequaled, raise rates to cover the extra work.