Research: Tech blockers 2022 – cutting the costs of AML compliance
The “Cutting the Cost of AML Compliance” research by LexisNexis Risk Solutions found that UK banks are spending almost £30 billion complying with anti-money laundering regulation, with three quarters of budgets being spent on people and only a quarter on technology.
The 2021 survey of 301 heads of financial crime compliance within financial services, found that people-related costs were dominating financial crime compliance budgets, with 70% spent on hiring, training, and retaining staff, and just under 25% spent on technology (systems, solutions and data).
This correlates with a previous study in 2020, which showed two thirds of compliance budgets being spent on people.
The implication is that the financial services sector’s response to financial crime compliance is significantly more labour-intensive than technology-driven, suggesting significant gains in both efficiency and cost effectiveness are readily achievable, through greater use of data and technology, for example to:
- Increase capacity – process greater volumes of customer onboarding checks
- Increase efficiency – perform existing checks in less time
- Reduce costs – lower cost per check and reduced false positives
- Significantly free up staff time to spend on higher value-add compliance activities
- Improve compliance systems and processes to focus more on prevention, rather than relying too heavily on detection.
This latest study seeks to validate the sector’s focus on people-centric delivery, through a series of in-depth interviews to understand why this is the case and whether this balance is expected to change in the foreseeable future.
For this, LexisNexis Risk Solutions and Oxford Economics have probed a series of well-informed CXO perspectives: Chief Compliance Officers, Chief Operating Officers, and Chief Digital or Technology Officers, directly responsible for delivering Digital Transformation.
The interviews and the findings are available in this free research report – we hope you find useful and informative!
Please contact the FinTech Futures team to gain access to this research report.
Brought to you by LexisNexis Risk Solutions
