Indonesia True Cost of Financial Crime Compliance Study

Our study delivers a current snapshot into what’s top of mind for many industry leaders and illustrates the biggest financial crime compliance costs and operations challenges facing financial services firms in Indonesia today.

As the Indonesian Financial Transaction Reports and Analysis Centre (PPATK) pushes for the readiness of all parties involved in the Anti Money Laundering (AML) and Terrorism Funding Prevention Regime (APUPPT) in Indonesia, regulatory scrutiny is beginning to rise. Couple this expanding regulatory focus with the region’s inherent risks of financial crimes and money laundering and it is easy to see how compliance pressures are a main concern for Indonesian financial institutions. Our study breaks down collective challenges:

• 65% of financial firms in Indonesia expect alert volumes to increase this year
• The median times to clear alerts for the following activities are:
  • 16 hours for AML transaction monitoring
  • 6.5 hours for periodic watchlist filtering
  • 6.5 hours for sanctions alerts 
  • 3.5 hours for Know Your Customer (KYC)/Customer due diligence
• 51% of financial firms in Indonesia feel financial crime compliance has a negative impact on productivity with over half of financial services firms are losing at least 25 or more hours of productivity per Full Time Equivalent (FTE) due to compliance challenges 
• 51% of financial firms in Indonesia feel financial crime compliance has a negative impact on customer acquisition, and 47% of firms surveyed are now losing 3%+ of new customer opportunities due to refused accounts/walkouts during onboarding
• Hospitality, Retail/e-Commerce and real estate pose the highest money laundering risk for financial firms in Indonesia and require extra due diligence time and attention

Our study results also provide in-depth perspective into how operations challenges and cost pressures stemming from the COVID-19 pandemic are testing financial institutions. The study illustrates the top five challenges compliance departments in Indonesia are experiencing during the COVID-19 pandemic and the resultant remote working period:

• 77% are facing delayed onboarding of new accounts
• 65% are facing Increased alert volumes/suspicious transactions
• 61% are dealing with less productivity overall
• 58% are navigating longer times required to complete due diligence for onboarding
• 57% are dealing with difficulty accessing KYC/due diligence sources of information

The study outlines how a multi-layered solution approach not only maximizes the effectiveness and cost-efficiency of key due diligence workflows, it also delivers insights for customer management activities and business opportunities across critical customer and third-party relationships.

See how your current financial crime compliance program compares to your peers in the Indonesian market. Explore the complete LexisNexis® True Cost of Financial Crime Compliance Study for Indonesia 2020 now.