ATLANTA — LexisNexis® Risk Solutions released the results of its 2020 True Cost of Financial Crime Compliance Study – U.S. and Canada Edition. The survey of compliance professionals identifies the drivers and influencers affecting financial crime compliance and highlights spending trends. This year, the study also explores the range of challenges that financial institutions (FIs) have experienced during the COVID-19 pandemic.
The survey finds that the cost of financial crime compliance has risen sharply since 2019, up to a projected $42 billion across U.S. and Canadian financial firms this year. This is a sizeable 33% jump from 2019, when the total projected cost was $31.5 billion. The study projects cost in 2020 to be $35.2 billion in the U.S. alone, with Canadian FIs contributing $6.8 billion.COVID-19 Impact
Operational challenges arising from COVID-19 protocols and subsequent remote working requirements have also negatively impacted the effectiveness and efficiency of key compliance activities. The figures below represent respondents who reported a moderate to significant negative impact on these key financial crime compliance processes.
“Given the events of 2020, it is no surprise that compliance industry professionals felt a sizable change in compliance operations,” said Leslie Bailey, senior director of financial crime compliance strategy for LexisNexis Risk Solutions. “A multi-faceted approach that includes efficient technology, intuitive analytics and extensive global risk intelligence can help financial institutions optimize their resources and navigate these changes without compromising the customer experience.”
FIs that have invested in compliance solutions will be better prepared to deal with the new normal and any further sudden changes. As the cost of doing business rises in the COVID-19 environment, the added cost of compliance may become a negative tipping point, with businesses experiencing diminishing returns as companies add more labor resources.Methodology
Download a copy of the 2020 True Cost of Financial Crime Compliance Study – United States and Canada Edition. For a discussion of the study’s key findings, Association of Certified Anti-Money Laundering Specialists (ACAMS) members may register for a webinar featuring Daniel Wager, vice president, global financial crime compliance strategy for LexisNexis Risk Solutions on Friday, October 23, 2020 at 1:00 pm ET.
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.