LexisNexis Risk Solutions has revealed that geopolitics and anti-money laundering regulations are major contributors to costs borne by financial services firms across the EMEA region.
In its latest EMEA True Cost of Financial Crime Compliance Study, LexisNexis found that 71% of respondents identified geopolitical risk as the top external trend impacting costs, followed by increasing anti-money laundering regulations at 70% and evolving criminal threats at 69%.
The report notes that the research predates several current geopolitical crises, such as the war in Ukraine, adding that “it shows decision-makers in financial crime compliance teams were already seeing emerging risks that have defined global business and political trends in the first half of 2022.”
The report shows that geopolitical risk is significantly heightened in markets such as Poland, the wider Central Eastern European region and the UAE.
Respondents expect the average costs will continue to increase between 4.3 – 10.1%, not including spikes in general inflation across EMEA.
Rocio Suarez Gray, director of financial crime compliance, LexisNexis Risk Solutions, commented, “It is not just the cost of compliance but also the complexity of it that poses a fundamental challenge for financial institutions in EMEA.”
“Financial firms have a finite pool of talent available to them to react to external issues and regulatory demands.”
“The right technology can elevate humans to focus on more strategic tasks and continued innovation is key to being a step ahead of criminals to detect and deter financial crime effectively. Understanding trends around solving compliance complexities will continue to be a focus for this ongoing research project.”
