Douglas Wolfson

LexisNexis Risk Solutions have released its latest survey titled The True Cost of Anti-Money Laundering (AML) Compliance: Asia Pacific Edition, wherein, the report shows that AML compliance rates have risen from 9% to 10 % in the past two years.

Other key findings include, midsize to large financial firms having significantly larger annual average compliance outlays than smaller firms, ranging from $11.95 to $13.93 million for larger firms and $1.18 to $2.08 million for smaller firms. Labour services represent a higher cost at larger firms and despite the labour intrusive nature of AML, there have been limited newer technologies across firms in the region.

“As compliance regulations grow in complexity and translate into more alert volumes, it will become increasingly difficult for APAC financial firms to keep pace, manage false positives and avoid non-compliance issues,” said Thomas C Brown, senior vice president, US Commercial Markets and Global Market Development at LexisNexis Risk Solutions. “However, technology can ease the burden of effectively managing the impact of AML compliance on the business. It’s not just about managing direct costs, but also the indirect and opportunity costs that are historically harder to measure, such as those associated with lost prospects and future revenues linked to delays at onboarding.”

The study reveals that de-risking is a top driver for AML functions among financial institutions in the APAC region it as a leading driver compared to those in other markets.

“Financial executives who face personal liability for non-compliance can be wary of foregoing human input with regard to risk decisions,” said Douglas Wolfson, director, Market Planning at LexisNexis Risk Solutions. “However, aligning humans with technology to help compliance teams analyze existing data, have access to other external information and make decisions from a more holistic view of the customer can result in a more effective means of preventing financial crime over the long term.”

by Megha Bhattacharya
Market Analyst at IBS Intelligence