A new report from LexisNexis, titled Future Financial Crime Risks 2017, has revealed that more sophisticated criminals are expected to be the biggest future risk to financial service firms, with geopolitical tensions following as a close second.
More than two-thirds (67%) of global investment bankers said evolving criminal methods was the biggest single financial crime risk they faced.
Compliance costs
This has thrown up challenges in updating tired computer systems and covering a plethora of compliance and regulatory bases.
Hiring skilled staff to deal with increasingly complex issues as well as upgrading dated technology were considered the two biggest costs in compliance.
Of those surveyed, 69% said old computer systems would be a big barrier to fighting financial crime in the future.
Those working in compliance departments of large firms seemed to have benefited from the changes – the average salary for a head of compliance hit £158,000 ($203,390, €181,122) in 2016 rising 2% faster than the average UK salary.
Collaboration works
The same report found that firms were, on the whole, happy with at least one policy introduced by regulators.
The Senior Managers’ Regime, implemented by the FCA in early 2016, was viewed by 61% of respondents as being more positive than negative since its introduction.
Increased collaboration between the business and its compliance group was cited as a key benefit of the new regime, as was an improvement in the proportion of senior management making time for compliance.
A further 70% said making executives responsible for employee actions had been positive for the financial services industry as a whole and 63% of asset management firms said it had had a more positive than negative effect on their firm’s risk appetite.
However, the report did conclude confusion and lack of guidance over what action, or lack of action, leads to trouble has led to micro-management, over-reporting and ‘box-ticking’ compliance behaviour as opposed to fighting financial crime.
Another 61% said the higher level of responsibility expected of them has made their job more difficult.
