Asian Bankers Association (ABA) and LexisNexis Risk Solutions co-hosted a webinar on Navigating the Impact: Financial Crime Compliance Costs in APAC on 16 May 2024.

Moderated by Shirish Pahak, Managing Director of Fintelekt Advisory Services, the one-hour session featured two distinguished industry experts, namely, Julia Chin, Principal of JFourth Solutions, and Ramanathan Sivabalan, Director of Market Planning, APAC Financial Crime Compliance and Payments at LexisNexis Risk Solutions. Ms. Chin and Mr. Sivabalan discussed the findings from the latest True Cost of Financial Crime Compliance Study, explored the driving factors behind rising costs, and provided strategic insights for managing these challenges.

Summary of Discussions:

(1) The True Cost of Financial Crime Compliance by Ramanathan Sivabalan:

• The study, commissioned by LexisNexis and conducted by Forrester Consulting, revealed a substantial increase in compliance costs for 98% of financial institutions (FIs) in 2023, totaling US$45 billion across the APAC region.
• A primary driver of this cost escalation is the intensification of financial crime regulations and heightened regulatory expectations, as identified by 39% of the surveyed institutions.

(2) Compliance Challenges and Cost Management:

• The conversation highlighted the critical need for FIs to find ways to reduce compliance costs while still adhering to stringent regulatory standards.
• It was noted that 81% of FIs are prioritizing cost-cutting measures in their compliance programs over the next year.

(3) Strategies for Navigating Compliance Costs discussed by Julia Chin and Ramanathan Sivabalan:

• Key strategies discussed included leveraging advanced technologies to improve efficiency, integrating robust digital solutions to combat financial crime threats, and optimizing FCC programs without compromising business objectives.
• Participants were encouraged to stay proactive and adapt to the evolving landscape of financial crime compliance to maintain regulatory compliance and business resilience.

(4) Julia Chin’s Recommendations

In her concluding remarks, Julia Chin mentioned that many bankers were worried about the arrival of AI into the bank’s internal operations. Many bankers are concerned about losing their jobs to this new technology. Addressing that concern, Ms. Julia Chin answered emphatically “No”.

Instead, she argued that banks need to upskill their compliance team to execute more high-quality analysis and a higher value amount of work. The AI needs well trained professionals to run correctly.

(5) Sivabalan’s Recommendations

Mr. Sivabalan recommended that “organisations should encourage the development of a culture of compliance and motivate the staff to periodically train not just on compliance but also on business operations to ensure appropriate level of collaboration between teams, collection of adequate data and development of seamless customer facing interactions.”

Mr. Sivabalan added that along with compliance automation, these measures will boost better customer experience and compliance efficiency.

The webinar provided valuable insights and practical advice for financial institutions facing the dual challenge of rising compliance costs and increasingly complex regulatory environments. By engaging with industry experts and understanding the latest trends and strategies, participants are better equipped to navigate the financial crime compliance landscape in the APAC region.

If you would like to read the full report, pls scan the QR code below:

The video presentation of the session can be view in the ABA YouTube Channel here: