LexisNexis® Risk Solutions today released the first Australian edition of the LexisNexis True Cost of Compliance study ™. The study found that Australian financial services companies are expected to spend more than $ 2.54 billion (A $ 3.6 billion) on financial crime because of the increasing number of eligible employees and the difficulty of preventing financial crime.
The study, which surveyed 50 decision-makers in the Australian market between December 2021 and February 2022, is part of a larger Asia-Pacific Regional Study, found that the propensity of Australian financial firms to commit financial crimes has increased over the past 18-24 months. Eighty percent (80%) of Australian supervisors in financial companies rated money laundering as the greatest risk in their compliance operations. Respondents also noted that third parties who provide professional services, such as accountants and lawyers, have played a role in facilitating money laundering for previous crimes.
Rising anti-money laundering (AML) rules, the development of criminal threats and the continuing effects of the pandemic have led to increased financial crime costs to $ 19.2 million (A $ 27.6 million) for major Australian financial institutions and led to increased investment in both works and techn.
The main conclusions from study of the true value of compliance in 2022 – Australian edition:
- Work as a factor in increasing compliance costs – More than two-thirds of financial institutions surveyed said that since 2019, they have increased the number of employees who meet the requirements. Work and training accounted for 54% of the average cost of execution, while technology, including the addition or maintenance of networks or systems that support remote work during a pandemic, accounted for 41% of the cost.
- Using technology to address compliance issues – Large financial institutions that have invested in technology solutions to support financial crime control have had less of an impact on conservation spending and operations (nearly $ 17.5 million or A $ 25 million per year), more high efficiency and less pandemic-related problems. Those who spent less on technology than the industry average spent an average of $ 18.9 million ($ 28.7 million) on annual financial crime claims.
- Increased susceptibility to a number of financial crimes – Money and financial crimes related to digital payments are increasing and greatly contributing to rising costs of maintaining financial crimes. Respondents reported an increased risk of money laundering (TBML), third-party fraud (supply chain corruption, professional consultants), proceeds of trafficking, and the criminal use of new technologies and techniques, including cryptocurrencies.
“Australian financial institutions have rated e-commerce and retail as the most risky for money laundering,” said David Haynes, vice president of Lexis Nexis Risk Solutions. “Against the backdrop of growing regulatory pressures and emerging threats, retailers and e-commerce retailers need to be prepared to increase the costs of digital transformation.”