The financial services industry’s challenges with anti-money laundering (AML) and sanctions compliance have intensified because of new scandals, increased regulatory enforcement and changing sanctions regimes worldwide. Financial institutions, already compelled to adapt to the new realities, are trying to figure out how to respond to increased scrutiny while reckoning that they may not be doing enough. AlixPartners’ 2018 global AML and sanctions compliance survey polled 372 financial institutions in 71 countries to gauge how financial institutions are managing compliance challenges in light of changing and increased regulation.
At a glance
- National as well as transnational regulatory and standard-setting bodies are increasing their levels of regulatory scrutiny and enforcement activity.
- Boards of directors seem engaged in AML and sanctions compliance matters, but 44% of survey respondents reported they do not provide AML and sanctions training and/or regular briefings for their boards.
- The trend of de-risking has continued through 2018, amplifying compliance challenges for financial institutions globally.
- There is a renewed focus on adequately identifying, quantifying, and managing AML and sanctions risks.
- Transaction monitoring systems for AML and sanctions continue to be a significant cost center and area of focus for financial institutions.
- The new U.S. customer due diligence rule and the continued global focus on ultimate beneficial ownership continue to pose challenges for financial institutions globally.
- Benchmarking and independent validations of AML and sanctions programs have not been fully or widely adopted.