[usrusr]

They are mandated to do flagging, but cannot be forced to be good at it. An incentive would not necessarily make them better at it, but it would still add rewards to all the cases they do find, despite all the squinting and bugs and carefully assigning the lowest performers to the task.

[nostalgk]

I'd imagine the fee would need to be at least a bit more rewarding than the current punishment is punishing.

[usrusr]

As I wrote in the second paragraph ("cynicism level a bit darker"), it would be impossible for rewards to outbid transaction fees anyways, because the latter can be inflated in plausibly deniable cooperation between launderer and bank: slap on some bogus insurance, the 24 hours on call special and that outrageously expensive package that would in theory allow to summon a clerk being flown out to your yacht. All understood, on both sides, to be specifically designed to increase transaction fees to make turning a blind eye worthwhile. Money launderers know everything about reading and writing between the lines, it's basically their job.

Banks would still just catch the small fish who shop around for the lowest rates like a regular person. In the end, sibling comments about snakes and hazards are right.