True Cost of Financial Crime Compliance
What’s in this report from LexisNexis Risk Solutions and Forrester Consulting:
Financial crime compliance costs have increased for almost every organization, according to research by LexisNexis and Forrester Consulting, which found that the total cost of fincrime compliance in the U.S. and Canada was upwards of $60 billion in 2023.
“As the cost of financial crime compliance rises for organizations across the U.S. and Canada, organizations must take a strategic approach to financial crime compliance,” said Matt Michaud, global head of financial crime compliance at LexisNexis Risk Solutions. “Skilled in-house compliance teams play a crucial role, but businesses should be actively seeking ways to reduce labor costs while simultaneously improving compliance efficiency. Organizations also need to actively counter cybercriminals exploiting artificial intelligence, cryptocurrencies and digital channels.”
A few other key findings from the report, which also offers recommendations for fighting financial crime:
- 79% of organizations noticed rises in technology costs related to compliance/know your customer (KYC) software in the past 12 months, while technology costs associated with networks, systems and remote work have increased at 75% of businesses.
- 78% 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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