The True Cost of Financial Crime Compliance Study, compiled by LexisNexis Risk Solutions, projected the cost of financial crime compliance at $42 billion across U.S. and Canadian financial firms this year. The costs break down to $35.2 billion for U.S. firms and $6.8 billion for Canadian firms. Total costs are up 33 percent over 2019.
However what American and Canadian financial institutions are paying to combat financial crime still pales in comparison to their counterparts in Europe, who spent $137 billion on financial crime compliance worldwide in 2019, according to another LexisNexis study.
Specific banks have also been in the press for their expenditure: Deutsche Bank announced that in 2019 they spent over $1 USD billion on AML remediation, and Wells Fargo are reported to have spent approx. $20 USD billion in 4 years on compliance related costs, with around $11 USD billion spent on consultants.
The question now is whether these are the necessary cost of compliance, or is money being thrown at trying to fix broken risk controls and frameworks? Are we being innovative or using the same re-engineered approaches to try and fix the same manual issues whist data remains fragmented and silo? Are we leveraging FinTech and RegTech opportunities or is it just a "hot topic" conversation?
We are also beginning to see increasing enforcement action but at the same time more redundancies and down sizing of compliance functions.
Have these teams become too large due to inefficiencies in the processes, or have we been hiring the wrong skill sets.
Are we at a crossroads for transformation of the compliance industry in terms of skill set and compliance resourcing needs?
Join us in this webinar to discuss these issues and much more – our industry is changing and we need to understand what is around the corner.
Would you be interested in speaking at our webinar this week?
It's about innovation evolution and how we expect to see the skill set needs of compliance officers change and also the importance of culture.
If you are interested please contact us at email@example.com
Director of Black Swan Group
Director, Asia-Pacific of MyComplianceOffice
Managing Director & Founder of RAW Compliance and Virtual Risk Solutions