NEW YORK—The projected total cost of financial crime compliance across the global finance sector amounts to around $180.9 billion, a new report by LexisNexis Risk Solutions reveals.
By facilitating a survey of 898 relevant business leaders and decision-makers across all major regions of the world, researchers at LexisNexis Risk Solutions also noted several trends driving corporate governance in the financial sector, reported CPO Magazine in its analysis.
These were derived from “responses on processes such as sanctions monitoring, know your customer KYC remediation, anti-money laundering and transaction monitoring, among others,” researchers said.
According to the researchers, the report’s findings illustrate how businesses that are “utilizing targeted financial crime compliance technology tools” are the very same businesses finding ways to “capture enterprise efficiencies” and “overcome the negative cost and operations impacts of compliance.”
The report, entitled the ‘True Cost of Financial Crime Compliance Study Global Report’, reveals five overarching findings, CPO Magazine said.
Negative Impact
First and foremost, the researchers found that financial crime compliance challenges have a negative impact on productivity and employee retention.
This is so much the case, in fact, that compliance teams are stressed “to a degree where managers worry about retaining skilled professionals,” and 67% of compliance decision-makers are “concerned with job satisfaction within their workforce.” These trends have a negative effect on financial institutions in Latin America, Europe, the Middle East and Africa in particular, the report suggests.
Also notable is that the regions of the world hardest hit by financial crime compliance costs in general are Europe and U.S.
“This is because, the report reveals, there are a significantly larger number of financial institutions that exist in these regions when compared to the rest of the world. According to LexisNexis Risk Solutions, the average annual financial crime compliance costs are highest for mid- to large-sized financial institutions in the U.K., Germany, France, Italy and the Netherlands. (These are defined as institutions possessing more than $10 billion in total assets),” CPO Magazine stated.