Almost every financial institution based in Emea faced a surge in the cost of financial crime compliance in 2023, according to a recent study published by LexisNexis Risk Solutions.

The True Cost of Financial Crime Compliance Study, conducted in partnership with Forrester Consulting, found that financial firms spent US$85 billion in complying with financial crime requirements.

This represented an increase in the previous year’s spending for 98% of financial institutions. In addition, over a third (35%) of the firms interviewed for the report, identified the escalation of financial crime regulations as the primary cause of their increased compliance costs. 

Consequently, more than three-quarters of firms (81%) are prioritising compliance programme cost-cutting in the next 12 months.

Technology, along with labour, made up a significant proportion of the costs.

The study also looked at the type of financial crime impacting financial institutions and found that cryptocurrencies and AI, along with digital payments, had seen the biggest increase in activity.

“The cost of financial crime compliance is clearly rising for FI across EMEA which is being felt by teams across the entire compliance workflow,” said Matt Michaud, global head of financial crime compliance at LexisNexis Risk Solutions.

“Skilled in-house compliance teams are essential, but businesses should be actively seeking ways to reduce labour costs while improving compliance efficiency.

“Criminals adapt quickly and FIs require a partner with advanced tools, data and analytics to not only keep pace but to stay ahead," said Michaud.

The study involved 482 financial crime compliance professionals at financial institutions within the EMEA region. 

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