In addition to increasing regulatory and reputational pressure, European financial institutions are facing compounding costs to combat money laundering.
Germany leads the compliance spending pack by a wide margin, with France and Italy in tow.
These costs beg the questions:
- How effective are the results of increased compliance spending?
- Are firms simply throwing money at risk problems in hopes of making them disappear?
- With the increased emphasis on technology compliance solutions, are institutions applying the right tools to the core money laundering problems?
Over the past two years, overall anti-money laundering compliance costs in Europe have increased by 21% and financial institutions expect these to grow by a further 19% in 2017, while sanction compliance costs are expected to rise by 17% on average.