Cost of Financial Crime Compliance

Achieve a Risk-Responsive Financial Crime Compliance Strategy

Our study illustrates 2020’s biggest financial crime compliance cost impacts. It also details how a risk-responsive compliance strategy helps maximize effective decision outcomes.

How Do Compliance Costs Impact Business Performance? 

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Capture Efficiency without Compromising on Financial Crime Compliance

Cost of Financial Crime Compliance
Many financial institutions have spent 2020 navigating rising financial crime compliance costs, expanding regulatory complexities and a unique, fast-evolving financial crime threat landscape.  No business is immune to the pressures of trying to achieve growth objectives while balancing operations impacts and rising compliance expenses.  As you work through today’s fluid business climate, how does your business compare to your competition?

The LexisNexis® Risk Solutions 2020 True Cost of Financial Crime Compliance Study reflects the latest results from a comprehensive survey of banks and financial institutions in the U.S. and Canada. The study delivers a current snapshot into what’s top of mind for many industry leaders and illustrates the biggest financial crime compliance costs and operational challenges facing financial services firms in the U.S. and Canada.   

This study explores how financial crime compliance costs have increased by 33% in 2020 and breaks down the details behind these numbers: 

  • The total projected cost of financial crime compliance across all U.S. and Canadian financial firms is $42B for 2020, a significant jump from $31.5B in 2019
  • $20.5 million is the average annual financial crime compliance operations costs for large (Assets of $10B+) financial services firms in the U.S.
  • $19.5 million is the average annual financial crime compliance operations costs for large (Assets of $10B+) financial services firms in Canada

Our study results also provide in-depth perspective into how the COVID-19 pandemic is testing financial institutions. The study illustrates the impacts compliance departments in the U.S. and Canada are experiencing during the COVID-19 pandemic and the resultant remote working period:

  • 42% are facing difficulty accessing Know Your Customer(KYC)/due diligence sources of information
  • 41% are navigating challenges tied to delayed onboarding of new accounts
  • 38% are experiencing longer times to complete due diligence for onboarding new accounts 

The study provides an in-depth overview of the challenges that are making financial crime compliance even more complicated for financial institutions. The study highlights specific metrics and inputs around several of the top financial crime compliance issues, including:

  • Expanded regulatory requirements and sanctions expectations
  • Customer risk profiling and KYC due diligence challenges
  • Positive identification of Politically Exposed Persons (PEPs) and ties to sanctioned entities
  • Operations delays and costs of false positives
  • Time drains of alert remediation
  • Impacts on transaction speeds and revenue conversion 
  • Labor and productivity issues within compliance team
  • Limited pools of talent with specific compliance expertise

The study also outlines how a multi-layered solution approach to financial crime compliance helps maximize the effectiveness and cost-efficiency of key due diligence workflows across critical customer and third-party relationships. The study provides numbers that illustrate how financial institutions that have invested in technology solutions to support financial crime compliance workflows have experienced smaller cost increases and less negative impacts from COVID-19.  
 
Benchmark your response to rapidly changing market conditions and escalating financial crime compliance demands. You’ll see how a risk-responsive financial crime compliance strategy enables your business to cost-effectively capture operations efficiencies without compromising on core business goals.     

Explore the complete LexisNexis® Risk Solutions 2020 True Cost of Financial Crime Compliance Study. Learn what’s fueling rising financial crime compliance costs and explore industry-driven findings. 

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