ING Apologizes for Discriminatory AML Practices, Signaling a Turning Point in Banking Compliance

In a striking acknowledgment of past missteps, ING has formally apologized to its customers for years of discriminatory anti-money laundering (AML) practices. The move casts a spotlight on one of the financial sector’s most enduring challenges: how to enforce rigorous AML regulations without marginalizing specific communities. ING’s statement represents a pivotal moment for the financial crime compliance landscape, suggesting a new institutional openness to addressing the unintended, human consequences of risk-based compliance controls. The ING case illustrates both the real-world impact of compliance mechanisms and the pressing need for banks across the sector to uphold principles of fairness and transparency in their anti-money laundering and counter-terrorist financing (CTF) strategies.

AML protocols have become a cornerstone of global banking regulation, shaped by the demands of European and national legislative frameworks. Institutions like ING are bound by comprehensive rules such as the EU’s Sixth Anti-Money Laundering Directive (AMLD6) and the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft), which impose strict customer due diligence requirements, transaction monitoring obligations, and reporting standards. These measures are designed to protect the financial system from abuse by criminal and terrorist networks. However, their real-world application often raises complicated questions about how banks interpret and implement these controls.

Discrimination within AML programs rarely arises from deliberate intent. More often, it emerges from how risk is perceived and operationalized. ING came under the microscope after a growing number of customers—particularly those from minority backgrounds, religious communities, or with international connections—voiced concerns about being subjected to excessive questioning and repeated requests for documentation. Simple actions such as sending money abroad, making donations during religious observances like Ramadan, or transferring funds to community organizations were frequently flagged for additional scrutiny. Many affected customers reported feeling distrusted and unwelcome.

The Dutch Wwft mandates a risk-based approach, allowing banks to tailor their level of scrutiny to a customer’s perceived risk profile. But this flexibility can inadvertently reinforce harmful stereotypes. Automated transaction monitoring systems often rely on algorithmic models that disproportionately identify certain behaviors as suspicious—patterns that may be common in migrant or religious communities. Without adequate cultural or contextual training, frontline staff can misinterpret normal customer behavior, making routine compliance checks feel intrusive or even discriminatory.

Over the last ten years, regulatory bodies including Dutch authorities, the European Banking Authority (EBA), and the Financial Action Task Force (FATF) have pushed European banks to bolster their financial crime defenses. ING itself was hit with a €775 million fine in 2018 for AML deficiencies, which intensified the bank’s internal compliance drive. In response to regulatory pressure, many institutions adopted automated systems that flag anomalous transactions. However, these tools, when based on broad demographic indicators, often result in certain communities being subjected to disproportionate scrutiny. Transactions involving cross-border activity, large cash movements, or religiously significant timing may trigger alarms, despite being entirely legitimate.

The EBA’s 2021 customer due diligence guidelines caution that controls must not be applied in a way that leads to unfair or discriminatory outcomes. Similarly, FATF insists that effective AML/CTF regimes must “not compromise financial inclusion or create barriers for law-abiding groups.” This places compliance teams in a difficult position: they must meet stringent regulatory standards while also ensuring every customer is treated equitably.

Following its apology, ING has laid out a roadmap for reform. The bank has committed to scaling back redundant inquiries, especially when customer data has already been verified. It also unveiled plans to launch specialized staff training focused on cultural awareness and understanding the financial behaviors of diverse communities. These steps reflect a broader shift within the banking sector, as institutions reevaluate their approach to balancing security and inclusion.

A number of best practices are now being adopted across the industry. Cultural awareness training is being implemented to help staff recognize and respect financial customs, holidays, and community behaviors, reducing the likelihood of misinterpreting legitimate activities as suspicious. Banks are also investing in more sophisticated transaction monitoring technologies, leveraging AI and contextual analytics to reduce false positives and better distinguish between genuine risk and typical customer conduct. Transparent communication is another emerging standard—banks are now explaining why certain information is requested, citing the relevant regulations, and clarifying how customer data is used. Customer feedback mechanisms are also being enhanced, with institutions increasingly seeking input from advocacy groups, religious organizations, and affected communities to fine-tune their procedures. Furthermore, many banks are actively collaborating with regulators and NGOs to ensure that AML measures do not disproportionately affect any specific group, aiming to keep financial services accessible and inclusive.

Support for this direction is coming from both national and EU-level authorities. The European Commission’s 2021 AML Action Plan emphasizes the importance of financial inclusion and warns against enforcement practices that result in exclusion. Dutch regulators, including De Nederlandsche Bank (DNB), have echoed these sentiments, encouraging institutions to adopt a proportional approach and monitor the real-world effects of their compliance activities.

The broader societal implications of discriminatory AML enforcement are deeply concerning. When customers feel unfairly targeted, confidence in the banking system suffers. Marginalized groups may turn to informal, unregulated financial alternatives, thereby weakening both financial inclusion and the effectiveness of anti-crime frameworks. This risk is especially acute for vulnerable populations such as newly arrived immigrants, small religious groups, or charities dependent on reliable access to banking services.

Under Dutch constitutional law and the EU Charter of Fundamental Rights, discrimination based on religion, ethnicity, or national origin is explicitly prohibited. Banks must uphold not only AML and CTF laws but also these bedrock legal principles of equality. A failure to strike the right balance between vigilance and fairness could expose banks to lawsuits, regulatory penalties, and long-term reputational harm.

ING’s efforts to reform its compliance framework signal a welcome cultural shift. As the bank adapts, it also sets a precedent for the industry at large. Embedding fairness, transparency, and proportionality into AML procedures is not just a matter of ethics—it is a strategic imperative. By investing in better tools, fostering dialogue with civil society, and cultivating cultural understanding among staff, the financial sector can create a more secure and inclusive banking environment.

ING’s apology is more than a corporate mea culpa—it’s a clarion call for the financial industry to rethink how it balances security with civil rights. As the banking sector evolves, those institutions that prioritize fairness and accountability in compliance operations will be best positioned to maintain public trust and fulfill their dual role: protecting the financial system while championing inclusion.

By fLEXI tEAM