| Financial service firms adopt combined approach to compliance & financial crime | | Print | |
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“Traditionally financial service providers have viewed financial crime and compliance as separate disciplines, says Paul Kerley, CEO of Norkom Technologies. “But within an increasingly tight-margined industry there is a strong desire to pursue a single investment stream to both reduce criminal losses and drive down the cost of compliance. This is now achievable since single technology platforms are now emerging that can detect crime, investigate it and compile the management information required to fulfil the regulator’s requirements.” Cost is clearly a fundamental concern; the need for greater efficiency is named as the first or second priority for all crime and compliance investment decisions by 100% of respondents. Norkom believes this financial motivation will make moves towards integration irresistible as companies recognise the financial benefits it can offer. “It can clearly be demonstrated that many of the processes and technologies employed to satisfy the regulator’s demands can deliver additional ROI by being deployed to fight crime,” says Paul. The research also reveals that traditional corporate structures hamper progress. Organisational inflexibility; the departmental silos that discourage cross functional communication, shared processes and pooled approaches, were named as the number one barrier to consolidation by 67% of respondents. “Those who are forging ahead, however, are motivated to do so by the experience of early adopters, which demonstrates that automation of both processes - and the improved detection performance it brings - can reduce the incidence of financial crime by up to 70% while lowering the cost of investigations required by the regulator, by up to 98%,” says Paul. The research also reveals that ID theft and money laundering are the financial crimes which give financial institutions the most widespread cause for concern, named as top three issues by 87% and 86% of respondents respectively. However, while not receiving the same number of responses in absolute terms, card fraud emerges as the top priority, listed by 67 of respondents as their number one concern. “It can come as no surprise that financial service providers are pre-occupied with financial crime and compliance,” concludes Paul. Analysts estimate that financial crime costs the global financial services industry £11 billion ($19 billion) per annum and that the cost of meeting compliance requirements will increase by 43% over the next three years. Click here to obtain your copy of the research report: ‘Securing the Future Against Financial Crime: Priorities, focus and early adopter trends’ Research methodology
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