Dirty data, dirty money: data protection failures and financial crime

In the digital age, your data is your defence. Or, at least, it should be.

As financial institutions, law firms and tech platforms alike rush to digitise every facet of client interaction, an uncomfortable truth is emerging: bad data can be just as dangerous as bad actors. When data integrity breaks down, so too does the frontline defence against financial crime. And increasingly, regulators are treating these failings as one and the same.

When Poor Data Becomes a Criminal Opportunity

Take the recent £42 million fine issued to Barclays in July 2025. The FCA’s ruling was unequivocal: despite known red flags surrounding James Stunt and linked entities, the bank failed to take adequate steps to review client risks. Dig deeper, and you find the root cause: fragmented data systems, unclear internal reporting lines, and a reliance on out-of-date client profiles.

Barclays isn’t alone. In late 2024, Metro Bank was fined £16.7 million for failing to monitor over £51 billion in high-risk transactions. Automated systems flagged nothing. Why? Because those systems were trained on incomplete, inconsistent, or outright dirty data.

These are not just compliance hiccups. They are the symptoms of a wider systemic issue, where poor data quality allows dirty money to flow unchecked.

GDPR Fines: The Tip of the Iceberg

We often think of data protection failures in terms of personal privacy. But when companies like Meta (€1.2bn fine), Amazon (€746m), or Clearview AI face scrutiny, it’s not just about cookie banners or opt-outs. It’s about systemic misuse, poor data controls and risks that cascade into financial vulnerability.

When sensitive data is poorly governed, criminals exploit cracks. Identity theft, social engineering, and insider fraud - these crimes don’t just happen in a vacuum. They flourish in environments where personal data isn’t respected or protected.

Dirty Data, Weak Compliance

Data quality isn’t glamorous. But in the compliance world, it’s everything. Inaccurate or siloed customer data can undermine ‘Know Your Customer’ checks, obscure beneficial ownership and hinder suspicious activity reporting.

Legacy systems, fragmented platforms, and poor inter-departmental coordination mean that risk profiles become outdated fast. A client marked low risk two years ago might now be under sanctions, but without real-time data harmonisation, that status won’t trigger a review.

This isn’t hypothetical. The National Crime Agency’s 2025 pilot with seven UK banks showed that when data is shared and cleaned across institutions, financial crime detection rates spike dramatically. Collaboration, underpinned by clean data, works.

The Legal-Technical Imperative

For legal, compliant and IT leaders alike, the call is clear: data governance must now sit at the heart of financial crime prevention.

This means integrating GDPR principles with AML obligations. It means investing in AI tools that can spot anomalies, yes, but also in the mundane (yet vital) processes of data cleansing, cross-referencing and audit trails.

Firms must break down siloes between DPOs, MLROs, CTOs and General Counsel. Because in today’s world, the risks of working in isolation are too high.

What Businesses Can Do Now

• Audit your data quality: Are client files up to date? Are systems flagging inconsistencies?

• Join data-sharing initiatives: Collaborate with banks, regulators, and industry bodies.

• Invest in regtech: Look for tools that enhance visibility, rather than add complexity.

• Align GDPR and AML teams: Create cross-functional workflows to ensure unified oversight.

Conclusion: Where The Law Meets the Ledger

Dirty data isn’t just a technical issue. It’s a legal liability and a reputational time bomb.

To stay ahead of both regulators and criminals, businesses need to treat data quality as a core compliance asset. That means recognising the overlap between data protection and financial crime and acting accordingly.

Ultimately, it’s not just about stopping the money. It’s about trusting the data that tells you where it’s going.

How Forbes Solicitors Can Help

Poor data governance is no longer just a compliance issue; it’s becoming a regulatory and criminal risk. With the FCA, ICO and NCA taking an increasingly hard line on data integrity, businesses face mounting exposure when “dirty data” allows financial crime to go undetected. At Forbes Solicitors, we help clients turn data risk into a defensible strategy.

We advise banks, law firms, tech platforms and senior executives on the overlap between data protection and anti-money laundering obligations, ensuring your systems, policies and reporting lines withstand scrutiny. Whether it’s responding to a regulatory investigation, strengthening your AML and GDPR alignment, or defending allegations of financial crime linked to data failures, our team is ready to act.

Led by Craig MacKenzie, Partner and Head of our High-Profile & Private Crime Division, we bring together deep experience in financial crime defence with a robust understanding of data governance and compliance frameworks. We work with urgency and discretion to protect our clients’ legal, commercial and reputational interests.

If you’re concerned about data integrity, financial crime exposure or regulatory compliance, contact Craig at [email protected] or call 01772 220022.