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The Cost of Anti-Money Laundering Compliance in Asia Pacific Region Increased 10% in Past 24 Months, Finds Study by LexisNexis Risk Solutions

LexisNexis Risk Solutions
2019-06-17 08:00 9425

HONG KONG and ATLANTA, June 17, 2019 /PRNewswire/ -- LexisNexis® Risk Solutions today released its latest APAC (Asia Pacific) survey, The True Cost of Anti-Money Laundering (AML) Compliance: Asia Pacific Edition. The report finds that AML compliance costs rose 9% to 10% during the past two years with growth expected to continue at a similar rate over the coming year.

The report represents the views of decision makers within the financial crime function who oversee Know Your Customer (KYC) remediation, sanctions monitoring and/or AML transaction monitoring at banks, investment firms, asset management firms and money services bureaus across Indonesia, Malaysia, Singapore and the Philippines.

Key findings of the True Cost of Anti-Money Laundering Compliance: Asia Pacific Edition survey:

  • True cost of AML: Midsize to large financial firms in Indonesia, Philippines and Singapore (assets totaling greater than $10 billion) have 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.
  • High labor costs: Labor represents a sizeable portion of AML compliance spend, which drives higher costs at larger firms. As a result, these firms are implementing labor-related steps to address the impact of non-bank payment providers and systemic risks, including enhanced training and controlling operations screening hours.
  • Limited use of new technologies: Despite the labor-intensive nature of the AML function within financial firms, the report reveals limited use of newer technologies across smaller and larger firms in the region.

The study reveals that business de-risking is a top driver for AML functions among financial institutions in the APAC region, though significantly more Indonesian firms (78%) place it as a leading driver compared to those in other markets.

"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."

"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."

Download a copy of the detailed report HERE.

About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers across industries. For more information, please visit www.risk.lexisnexis.com, and www.relx.com.

Yuri van der Leest
Teneo
+852 3655 0504
Yuri.vanderLeest@teneo.com

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Source: LexisNexis Risk Solutions
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