The Culture War

This week, the Association of Certified Anti-Money Laundering Specialists (ACAMS) released a report outlining the key steps to improve financial crime compliance culture. The report, based on a survey of 349 chief compliance officers and executives from regulatory bodies, discovered that “better technology, additional training and resourcing, and the reinforcement by middle management of the ‘tone from the top’” were crucial to improving the overall compliance culture.

Yet, out of the dozen or so actions identified to be taken to enhance financial crime compliance culture, one option elicited the overwhelming majority of responses. 

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ACAMS 'A Global Study into Anti-Financial Crime Culture - Have we come far enough? 18 May 2021

Specifically, the most needed improvement, according to a majority of respondents, is a greater investment in technology to combat financial crime. Notably, though, according to a co-author of the report, the “unavoidable conclusion [from the study is] that the biggest problems still facing the industry are cultural. The co-author elaborated on the point by suggesting that  “all too often, institutions view compliance as merely having [anti-financial crime] controls, and as such it is not factored into strategic analyses of the trade-offs between its potential risk and return.”

Yet, the much needed investment in technology doesn’t necessarily have to imply a trade-off, especially for those viewing it exclusively in the lens of absolute cost. According to the findings of LexisNexis’ latest True Cost of Financial Crime Compliance Study – EMEA Edition report, institutions that utilize technology as the cornerstone of their compliance programs enjoy clear benefits compared to  their peers. Notably, the findings indicated that those who allocated more than 50% of their compliance spend on technology exhibited a lower annual cost than those that dedicated the majority of their budgets on labor. Critical to a strong culture, respondents indicated that allocating more funds on regtech “elevates human resources to accomplish more high value tasks,” and makes “policies and expertise more accessible...thereby [making] it easier for [both] staff and clients to understand what is required to reduce the risk of financial crime.” At Sigma, we’ve heard the same from clients leveraging Sigma’s Terminal platform, especially in investigative workflows. The Terminal makes it easy for compliance teams to search across datasets consistently, return a standardized view of risk and pinpoint risk for timely, confident decision making in line with an institution's risk based approach - ensuring a more robust and consistent culture of compliance across the institution.

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