ATLANTA — LexisNexis® Risk Solutions released the results of its 2022 True Cost of Financial Crime Compliance Study – U.S. and Canada Report. The annual True Cost of Financial Crime Compliance Study compiles responses of compliance professionals to identify the drivers and influencers affecting financial crime compliance and highlights spending trends. The study found that the cost of financial crime compliance has continued its rise over pre-pandemic levels, up 13.6% since 2021, to approximately U.S. $56.7 billion in the U.S. and Canada combined.
A significant majority of U.S. (73%) and Canadian (86%) financial institutions reported an increase in financial crime compliance costs in a 12-month period beginning in April or May 2021. The average annual cost of financial crime compliance per organization has increased most among mid/large U.S. financial institutions, up to 14%. While the percentage increase is down from the 36% spike between 2020 and 2021, the cost among larger U.S. firms is 121% higher than before the pandemic and 71% higher among larger Canadian firms for this same period.Key Findings from the Report:
“Costs are high for financial firms because they are facing challenges by an even broader set of financial crimes, including crimes related to money mules, cryptocurrency, ransomware, digital transactions and supply chain corruption,” said Leslie Bailey, vice president, financial crime compliance, LexisNexis Risk Solutions. “The combination of these challenges is impacting productivity, due diligence and new customer acquisition. Financial institutions should have a more holistic, robust sanctions screening system and resources to adjust to increased geopolitical risks, the increasing level of digital transactions and the risk of an economic recession. Technology and data are a big part of the solution.”
The study surveyed 150 decision-makers in the U.S. (121) and Canada (29) who oversee KYC remediation, sanctions monitoring, financial crime transaction monitoring and/or compliance operations. Organizations included banks, investment firms, asset management firms and insurance firms. Respondents were requested to consider the time period of May 2021 through May 2022 in their responses.
Download a copy of the 2022 True Cost of Financial Crime Compliance Study – United States and Canada Edition.
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.
Senior Director, Global Communications