TD Bank is bolstering its anti-money-laundering practices with leadership changes and investment in data and technology following regulatory scrutiny resulting in major fines

The Financial Crimes Enforcement Network fined the Toronto-based bank $1.3 billion and the U.S. Department of Justice levied $1.8 billion in fines on Oct. 10, charging that TD failed to comply with anti-money-laundering (AML) laws, according to a DOJ release.

TD Bank failed to track and report money laundering transactions to authorities, violating the Bank Secrecy Act, and “prioritized growth and convenience over following its legal obligation,” the release stated. 

The $1.4 trillion bank failed to monitor 90% of its transactions, Leo Patching, chief executive of financial services regtech company Kompliant, told Bank Automation News. Given the size and number of transactions that the bank conducts, TD must invest in “real-time transaction monitoring, AI-driven predictive analytics and automated reporting tools,” he said. 

In response, TD is revamping its AML leadership team with 40 new AML specialists, including a new U.S. head of financial crime risk management and Bank Secrecy Act/AML officer, according to the company’s Oct. 10 release. TD has also hired more than 700 AML compliance specialists, the release stated. 

“We’ve already taken many actions to reduce AML risk and will continue to implement improvements powered by investments in data and technology,” TD President Leo Salom said during a briefing on Oct. 10. “We have implemented new technology solutions with stronger detection and data management capabilities, advanced analytics and modeling capabilities.” 

TD did not respond to BAN’s request for comment by publication time today. 

Rising AML threat

The fines levied against TD will lead institutions to make changes to ensure that they respond promptly to internally elevated risks, Sam Taylor, head of corporate intelligence at cybersecurity consultancy S-RM, told BAN. 

“This action [by the agencies] is a warning to other banks that eyes are on them again,” he said. 

Several banks announced plans to invest in their risk infrastructure in their third-quarter earnings reports, including: 

• The $2.4 trillion Bank of America; 

• The $1.6 trillion Citi; and 

• The $1.7 trillion Wells Fargo. 

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