Danske Bank A/S (Irish branch) · Governance finding · severity 3 of 5
On 13 September 2022 the Central Bank of Ireland reprimanded and fined Danske Bank A/S €1,820,000 because historic data filters in its group-wide automated transaction-monitoring system wrongly excluded certain categories of Irish-branch customers, including some rated high and medium risk, from anti-money-laundering monitoring for almost nine years between 2010 and 2019. Per the Central Bank, an estimated 348,321 transactions, about 2.43% of the branch's total, went unmonitored between August 2015 and March 2019. Danske learned of the inadequacies from an internal audit in May 2015 but did not act until the Irish branch found the issue in October 2018; it was fixed in March 2019. Danske admitted the three breaches and settled. The system was automated and not described as AI.
Record last reviewed Oct 21, 2026 · Markdown
Date
Sep 13, 2022 · disclosed Sep 15, 2022
Institution
Danske Bank A/S (Irish branch)
Country
Ireland
AI system
Group-wide automated anti-money-laundering transaction-monitoring system with historic data filters; not described as AI
AI?
Automated system not described as AI
The system was automated, but neither the institution nor a regulator described it as AI; it is listed because it is routinely discussed as an AI failure.
Category
Status
Settled
Severity
3 of 5
Impact
€1,820,000 fine (€2,600,000 before the 30% settlement discount) · An estimated 348,321 transactions (about 2.43% of the Irish branch's transactions) were not monitored for money-laundering and terrorist-financing risk between August 2015 and March 2019; Danske said it had not identified any financial loss to customers.
What happened?
Per the Central Bank of Ireland, Danske's transaction-monitoring system was a group-wide automated system first implemented in 2005 and rolled out to the Irish branch in 2006. It applied historic data filters that Danske never reviewed or adjusted for Ireland's Criminal Justice (Money Laundering & Terrorist Financing) Act 2010 when it came into force. The filters erroneously excluded certain categories of customers from monitoring, including some customers Danske rated high and medium risk.[1][3]
In May 2015 an internal audit report made Danske aware of the inadequacies in its transaction-monitoring system, but it did not notify the Irish branch or take adequate action for almost four years. The Irish branch identified the issue in October 2018, the fix was completed in March 2019, and the Central Bank was told in February 2019. The Central Bank estimated that 348,321 transactions, about one in forty processed through the branch, were not monitored between 31 August 2015 and 31 March 2019.[1][3]
The Central Bank found three breaches of the 2010 Act, covering transaction monitoring, enhanced customer due diligence and AML/CFT policies and controls, and treated the failures to fix the issue and to notify it promptly as aggravating factors. It was the first penalty the Central Bank had imposed on a financial institution operating in Ireland as a branch of a bank supervised elsewhere.[1]
When did it happen?
- May 2015
A Danske internal audit report identifies inadequacies in the transaction-monitoring system; the Irish branch is not told.[1]
- Oct 2018
Danske's Irish branch identifies the excluded customer categories and steps are taken to fix the system.[1][3]
- Feb 2019
The Central Bank of Ireland is told of the issue.[1]
- Mar 2019
Rectification is completed, per the Central Bank and Danske.[1][2]
- Sep 13, 2022
The Central Bank reprimands Danske and fines it €1,820,000 after a 30% settlement discount; it announces the sanction on 15 September 2022.[1][2]
What was the impact?
- Financial: €1,820,000 fine (€2,600,000 before the 30% settlement discount)[1][2]
- Customers: An estimated 348,321 transactions (about 2.43% of the Irish branch's transactions) were not monitored for money-laundering and terrorist-financing risk between August 2015 and March 2019; Danske said it had not identified any financial loss to customers.[1][2]
Severity 3 of 5: A regulatory finding and reprimand with a €1,820,000 fine for a monitoring gap lasting almost nine years that left an estimated 348,321 transactions unmonitored; no customer losses were identified.
How did Danske Bank A/S (Irish branch) respond?
Danske said it "deeply regrets and apologises" for the matters investigated, fully accepted the issues identified, and that the issues were fully remediated by March 2019. It said a third-party lookback review of 2016–2019 transactions found very low financial crime risk and led to only one suspicious transaction report on Irish-branch customers, and that it had not identified any financial loss to customers.[2]
What was the outcome, and did regulators act?
Danske admitted the three breaches, was reprimanded and paid €1,820,000 under the Central Bank's Administrative Sanctions Procedure, ending the investigation. The Central Bank used the case to warn that firms relying on automated transaction monitoring must ensure such systems are appropriately monitored and calibrated, and that group systems used by branches must meet Irish legal requirements.[1][2]
Why did the Central Bank of Ireland fine Danske Bank?
In September 2022 it fined Danske €1,820,000 because historic data filters in its group-wide automated transaction-monitoring system excluded certain categories of Irish-branch customers, including some high- and medium-risk ones, from anti-money-laundering monitoring for almost nine years, leaving an estimated 348,321 transactions unmonitored.
Was Danske's transaction monitoring system AI?
No. The Central Bank describes a group-wide automated transaction-monitoring system whose historic data filters wrongly excluded customers; the failure lay in filters nobody recalibrated for Irish law. Neither the regulator nor Danske described the system as artificial intelligence.
Was any money laundered through the unmonitored transactions?
No laundering has been reported. Danske said a third-party lookback review of 2016–2019 transactions found very low financial crime risk and led to one suspicious transaction report, and that it had not identified any financial loss to customers. The Central Bank did not quantify any laundering.
How long did Danske's monitoring gap last?
The Central Bank said certain customers went unmonitored for almost nine years, between 2010 and 2019. Danske learned of the inadequacies from an internal audit in May 2015 but did not act until the Irish branch identified the issue in October 2018; the fix was completed in March 2019.
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