The total annual projected cost of financial crime compliance in EMEA markets has increased with 21% across European markets, according to a report from LexisNexis Risk Solutions.
Its latest True Cost of Financial Crime Compliance Study – EMEA Edition revealed that costs have now amounted to USD 117.5 billion, with France, Germany, Italy, and the Netherlands reporting higher cost in 2020 compared to 2019 at 18.1%, 20.2%, 26.6%, and 22.2% respectively.
70% of firms expect COVID-19 to cause further compliance spend over the next 12 to 24 months and anticipate 69% of these costs to involve technology. This is crucial to compliance professionals in the EU tackling the impact of COVID-19 alongside increased or changing regulatory requirements in the form of the Fifth and Sixth Money Laundering Directives.
Furthermore, survey respondents indicate that allocating more spend to financial crime compliance technology solutions elevates human resources to accomplish more high value tasks.
Firms across EMEA allocating more than 50% of their budget on technology have comparatively lower overall average annual compliance cost at USD 44.6 million compared to USD 48.4 million for those dedicating higher spend to labour. These firms also benefit from a smaller negative impact when on-boarding new accounts with only 26% of mid to large firms indicating this as a challenge compared to 44% of firms with below average technology expenditure.
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