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Reducing the cost of anti-money laundering (AML) compliance

Banks and financial institutions can adopt new risk and other AML compliance practices to better manage regulatory costs

Overview

See more about rising AML costs

In an already stringent regulatory climate, banks and financial institutions face strict new hurdles around anti-money laundering (AML) compliance. Accenture estimates risk management and other costs tied to AML compliance have risen more than 50 percent in the last three years. With continued regulatory change and rapid implementation requirements, costs are predicted to remain high for the near future.

There are three contributing factors that contribute to ongoing cost increases, while identifying practices financial institutions can adopt to better manage AML compliance costs. Focusing on these critical areas is essential in helping lower AML compliance costs:

  • Transaction monitoring

  • Know Your Customer (KYC) and Customer Due Diligence (CDD)

  • Talent management

Key Findings

Some banks and financial institutions are making organizational changes to help reduce AML compliance costs, prevent fraud and financial crime, and boost efficiencies. These changes offer a solid start, but may not be enough to prevent increases in AML compliance budgets. This makes it all the more important, in our view, for institutions to understand, control and streamline their AML investments.

Ongoing requirements in three areas are raising AML compliance costs and keeping them high:

  • Transaction monitoring: Institutions continue to enhance transaction monitoring systems to work toward a “zero failure” approach to fraud and financial crime.

  • KYC and CDD requirements: Some financial institutions are pursuing remediation and look-back efforts due to changing requirements.

  • Talent management: Retaining AML-specific talent and hiring additional talent is a challenge in today’s highly competitive market for specialized financial skills.


"These factors make it a high priority, in our view, for institutions to understand, control and streamline their AML investments."

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Banks and financial institutions can take steps to keep AML compliance costs in check. Looking at the bigger picture of fraud and financial crime can help in building a holistic, comprehensive AML compliance strategy.

Going the next step, focusing on those areas that are driving cost increases can boost effectiveness for financial institutions. For example:

  • Using data analytics and a real-time AML compliance dashboard can help institutions address needs around transaction monitoring.

  • Building a global KYC/CDD governance program, resolving periodic review deficiencies and keeping ahead of proposed regulations can ease challenges around KYC and CDD concerns.

  • Structuring a human capital strategy can go far in helping a financial institution compete for, win and retain talent in a highly competitive talent market.

See the three areas where new efficiencies can make a difference.

Read the full report for more insights and for actionable steps toward lowering AML compliance costs.

 

DOWNLOAD REDUCING THE COST OF ANTI-MONEY LAUNDERING COMPLIANCE [PDF]


 

Authors

Mark Boyer
Managing Director, Finance & Risk Services 
He leads the North America Fraud and Financial Crime Group, specializing in complex, large-scale finance and risk programs.
Email to Mark Boyer. This opens a new window. LinkedIn
Philippe Guiral
Senior Manager, Finance & Risk Services.
He leads Accenture’s North America Financial Crime practice.
Email to Philippe Guiral. This opens a new window.  LinkedIn