Compliance costs for trade-based money laundering (TBML) have increased very significantly in the US and Canada in the two years to 2021 while the total projected cost of financial crime compliance in the region is up 58 per cent compared to 2019 according to a new report by LexisNexis Risk Solutions.
Its annual survey, True Cost of Financial Crime Compliance Study for the US and Canada, canvassed decision makers inside banks, investment firms, asset managers and insurance firms to identify the drivers impacting financial crime compliance and its costs.
TBML focus
The survey asked participants to indicate whether their firm’s exposure to different types of financial crimes had increased or significantly increased over the past 18-24 months.
It revealed that 56 per cent of US participants and 64 per cent of Canadian participants said the cost of TBML compliance had increased.
Highly exposed
Exposure to crimes involving TBML has increased significantly and these crimes have had big impact on compliance costs for US financial institutions.
Crimes involving digital payments however had the greatest impact on compliance costs for US financial institutions.
Compliance costs associated digital payments and the cost of compliance related to money mule accounts used to launder criminal proceeds were the only types of crime that had bigger impacts on compliance costs than TBML according to US participants in the survey.
Burgeoning costs
The survey illustrates the sharp increase in financial crime compliance costs compared with both the pre- and early pandemic timeframes. This rise is attributed in part to labour costs, increasing regulations and evolving criminal threats.
The total projected cost of financial crime compliance in the US and Canada in 2021 is approximately US$49.9 billion, up 19 per cent from 2020 and up 58 per cent compared to 2019 according to the report.
A copy of the True Cost of Financial Crime Study for the US and Canada can be obtained from here.
Categories: Trade Based Financial crimes News
Related Articles
-
US banks used to launder funds in illicit gold scheme, Russian national indicted
-
US financial institutions should remain vigilant for Russian attempts to evade US export controls say FinCEN and BIS
-
Partnerships between public sector agencies and reporting entities can strengthen measures to counter financing of terrorism
-
G7 to discuss trade in Russian-origin diamonds, gold and other metals