ATLANTA, June 9, 2021 /PRNewswire/
-- LexisNexis® Risk Solutions today released its
annual True Cost of Financial Crime Compliance Global Report. The
results derived from the comprehensive survey of 1,015 financial
crime compliance decision makers at financial institutions
including banks as well as investment, asset management and
insurance firms globally. The projected total cost of financial
crime compliance across all financial institutions reached
$213.9 billion in 2021, surpassing
the $180.9 billion recorded in 2020.
The majority of this sizeable year-over-year increase is
represented by Western Europe and
the United States.
Survey of Global Financial Crime Compliance Professionals Indicates
Increase of More Than $33 Billion
Year-Over-Year
The decision makers who took part in the study oversee financial
crime compliance processes such as sanctions monitoring, know your
customer (KYC) remediation, anti-money laundering (AML) and
transaction monitoring.
Key findings from the LexisNexis Risk Solutions True Cost
of Financial Crime Compliance Global Report:
- Western Countries Continue to Spend Highest on
Compliance – Western European countries and the U.S. continue
to represent 82.7% of global total projected costs. Germany and the U.S. bear the bulk of cost
increases at $9.6 billion and
$8.8 billion respectively with
Germany outsizing all other
countries by a considerable amount. Mid to large financial
institutions lead this growth where all regions, excluding
South Africa and the Middle East, show double digit percentage
increases in compliance costs.
- Less Consensus on Operational Challenges – In previous
years there has been consensus on the top two or three ranked
compliance challenges within financial institutions. There is less
uniformity in this year's survey. Customer risk profiling,
sanctions screening, regulatory reporting, identifying politically
exposed persons (PEPs), KYC for account onboarding and efficient
alerts resolution are all similarly ranked as key challenges.
Different regions see varying degrees to which certain challenges
are more heightened, however.
- Pandemic Impact – The ongoing pandemic has left a
significant imprint on compliance departments, which exacerbated
existing issues and led to an increase in the time and spending
needed for due diligence. Mid and large firms in the U.S. and
Canada and parts of LATAM
experienced sizeable pandemic-related cost increases. Key
operational challenges became heightened in these markets since the
start of the pandemic, including increased alert volumes and
suspicious transactions, inefficiencies with alert resolution and
due diligence, more manual work and limitations with proper risk
profiling/sanctions screening/PEP identification.
- Technology Investment Leads to Better Outcomes –
Financial institutions implementing technology solutions to support
financial crime compliance efforts have been more prepared and less
impacted overall by increasing regulatory pressures and COVID-19.
Compared to firms that distributed more of their annual compliance
costs to labor, those that allocated costs more toward technology
are seeing smaller year-on-year financial crime compliance
operations cost increases, lower costs per full-time employee and
fewer pandemic-related challenges.
Leslie Bailey, vice president,
financial crime compliance for LexisNexis Risk Solutions, said,
"Criminals will never cease to become more sophisticated, but a
multi-layered solution approach to financial crime compliance can
facilitate a more cost-effective, efficient compliance approach, as
well as one that benefits the larger organization. Financial
institutions should investigate both the physical and digital
identity attributes of their customers, leveraging data analytics
to assess risks and behaviors in real time."
Continues Bailey, "There is now increased recognition among
financial institutions that financial crime compliance initiatives
provide broader benefits. Utilizing the right technologies as
compliance workforces grow allows the team to focus on
higher-value, more complex compliance tasks that require skilled
human analysis."
Download a copy of the True Cost of Financial Crime Compliance
Global Report.
About LexisNexis Risk Solutions
LexisNexis Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information and analytics for professional and business
customers. For more information, please visit
www.risk.lexisnexis.com and www.relx.com.
Media Contacts:
Marcy
Theobald
LexisNexis® Risk
Solutions
678.694.6681
marcy.theobald@lexisnexisrisk.com
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