True Cost of Financial Crime Compliance Annual Report

By neub9
2 Min Read

True Cost of Financial Crime Compliance

What’s in this report from LexisNexis Risk Solutions and Forrester Consulting:

Research by LexisNexis and Forrester Consulting has found that financial crime compliance costs have risen for nearly every organization. In 2023, the total cost of financial crime compliance in the U.S. and Canada surpassed $60 billion.

According to Matt Michaud, global head of financial crime compliance at LexisNexis Risk Solutions, in-house compliance teams are crucial in addressing the increasing costs of financial crime compliance. However, organizations need to find ways to reduce labor costs while improving compliance efficiency, and actively combat cybercriminals who exploit artificial intelligence, cryptocurrencies, and digital channels.

The report also offers recommendations for combatting financial crime and presents the following key findings:

  • 79% of organizations noticed rises in technology costs related to compliance and know your customer (KYC) software in the past 12 months. Technology costs associated with networks, systems, and remote work have increased at 75% of businesses.
  • 78% of small financial institutions witnessed higher increases in compliance costs related to labor compared to their mid and large-sized counterparts (63%). Conversely, mid-sized and large financial institutions were more likely to experience higher cost escalations for technology, particularly in compliance with KYC software (82%) and external costs associated with outsourcing (79%).
  • When asked about the types of financial crime they had observed significant increases of more than 20% in the past 12 months, 22% of companies identified financial crime involving cryptocurrencies, while 22% reported heightened use of AI.
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