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LexisNexis' study shows USD 180.9 bln spent on financial crime compliance

Wednesday 8 April 2020 12:08 CET | News

LexisNexis Risk Solutions has released its True Cost of Financial Crime Compliance Global Report, which provides global industry-driven insights for financial services companies.

These companies are found across the Asia Pacific (APAC) region, Europe, the Middle East and Africa (EMEA), Latin America (LATAM) (including Mexico), and the US and Canada. The report reveals that the projected total cost of financial crime compliance in these markets amounts to USD 180.9 billion.  -898 decision-makers who oversee financial crime compliance and compliance operations at their companies were surveyed and their solicited responses were focused on processes such as sanctions monitoring, KYC remediation, AML and transaction monitoring, among others.

Key findings from the LexisNexis’ report show: 

  • Europe and US are the largest regional markets for financial crime compliance: Over 6,000 financial institutions in the US drive higher total spend on financial crime compliance, compared to other regions. Average annual financial crime compliance costs are highest for mid/large sized financial institutions (more than $10 billion in total assets) in the UK, Germany, France, Italy, and the Netherlands.  
  • Labour is a significant component of financial crime compliance costs, representing 57%; other factors include complex regulations, data privacy limitations, sanctions violations, with 40% technology and 3% other. EMEA leading labour cost spend at 62%. In APAC, it averages 54% of costs for those surveyed and scaling upwards for larger firms. 
  • Due diligence efforts take longer and increases costs: The average time required to onboard a mid-sized corporation has increased from 21 hours in 2017 to 36 hours in 2019.
  • Non-bank payment providers create additional compliance challenges and risk for financial companies, particularly in LATAM and Canada. Across all regions, the negative impact includes increased alert volumes, more correspondent banking risk, greater compliance team stress, and higher technology and labour costs.
  • Financial crime compliance challenges and issues have a negative impact on productivity at financial institutions, particularly in EMEA and LATAM. Across all regions, costs rose 7% annually during the past two years, with financial crime compliance processes and burdens negatively affecting productivity and new customer acquisition efforts. 

More: Link


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Keywords: financial services, financial crime, compliance, LexisNexis, risk, KYC, AML, transaction monitoring, regulations, data privacy, sanctions, non-bank
Categories: Securing Transactions | Digital Identity, Security & Online Fraud
Countries: World
This article is part of category

Securing Transactions