As financial regulators continue to increase AML regulations, the cost of remaining compliant is getting higher. According to the experts, these AML compliance costs are set to grow at an increasing pace so how can businesses in the financial industries combat this? Read on to learn how you can cut the cost of AML compliance in our Neopay guide below.
Why Is AML Compliance So Expensive?
Risk profile and criminal threats can play a large part in increasing the costs of AML compliance; however, this isn’t the major factor affecting this. Back in 2020, the 5th Money Laundering Directive was integrated into the requirements of the UK money laundering regulations. As a result, UK firms estimated that it would cost them around three quarters of a million pounds to implement the changes.
Additionally, the complexity of the money laundering directives also impacts the cost and requires firms to do all that they can to avoid a hefty fine.
Invest In Training
One of the most effective ways to cut the cost of AML compliance is to train staff on what they need to do. Yes, staff training is expensive for a number of reasons but it can be worth the extra cost in the end. When your staff understand what is expected of them, they can stay ahead of the regulations and avoid any major issues. Additionally, a well-trained workforce can easily train new staff to keep everyone on the right track.
If you can spend a little to get resources that work for everyone, you’ll save money in the long run.
Better Data Management
If you aren’t managing your data effectively, you could find that the cost of AML compliance soars. With better data management, you can ensure that everything is as it should be and often, new technology is a good way to achieve this. Data management is all about keeping track of things and having processes in place for any red flags.
Look into data management tools to save time and money while also remaining compliant with the AML regulations.
Stay Up to Date
You could find that you are spending more on AML compliance because you are not on top of the changing regulations. These regulations can change and become stricter relatively frequently and if you wait to comply with the regulations all at once – the cost could be greater. By spreading out the workload and staying on top of any changes, you can cut the costs of AML compliance easier than you think.
Use The Right Technology
It should be noted that using specialist technology can massively impact the overall cost of AML compliance. Technology tends to make things easier and cut down on resources required – so it doesn’t hurt to consider your options. Recent reports show that firms that utilise more advanced technology and data systems, incur lower compliance costs. These firms also expect compliance cost growth to be slower than for other firms, which suggests that data and technology plays a crucial and effective role in helping firms reduce the cost and burden of AML compliance.
Neopay’s 123signed technology takes a multi-layered approach to financial crime compliance, ensuring your regulatory AML and monitoring requirements are covered in a quick and easy process. Incorporating KYC and KYB processes, and an efficient transaction monitoring system, 123signed allows you to identify fraudulent activity during the onboarding process in real-time. As an automated tool which aggregates multiple solutions, 123signed provides everything you need in one cost effective application. Get in touch today to find out more.