NEW YORK – Financial services firms could reduce anti-money laundering (AML) costs by up to 40% by introducing more advanced technology, according to new research by US risk and compliance technology firm Fortent.
The white paper, Taking Costs Out of Compliance: Smart Ways to Boost Your Operation’s Return on Investment, says although the cost of compliance technology to financial services firms is perceived to be high, sustaining the higher cost of investigations and filing suspicious activity reports drains a greater share of compliance budgets.
“CEOs, expense chiefs, operations officers, and compliance directors can derive immediate value and return on investment while at the same time achieving more rigorous compliance standards for regulators,” says Michael Recce, Fortent’s chief scientist and the study’s author.
The paper suggests three steps to lowering the cost of AML technology. The first is the reduction of data silos that might have become more pronounced through firms’ organic growth or acquisitions. More dynamic profiling to reduce a tendency to produce false positives of older rules-based technologies is also recommended. Lastly, the study suggests turning pattern-recognition technologies towards detecting financial crimes such as insider fraud.