Recent Release | 20 Mar 2023

True Cost of Compliance – 2023 Report

Thought Leadership and Economic Consulting Teams

Oxford Economics

This report updates our 2020 research on the detection and prevention of financial crime, and it’s cost to the UK financial services sector. We surveyed 300 senior compliance executives about their costs and compliance activities, and used these results to estimate the costs across the UK Financial Services sector. The report, by LexisNexis Risk Solutions, includes interviews with senior compliance officials, and presents the factors driving increases in compliance costs, and how people and technology are employed across the full range of compliance obligations in the fight against fraud and money laundering.

Our survey explored in depth the trends in compliance costs across Financial Institutions in compliance departments and more front line roles, the factors driving compliance costs, and breakdown by type and compliance activity. We then carried out econometric analysis to calculate the total financial crime compliance cost for the UK financial services sector, as well as providing further analysis. This shows that the new sanctions relating to the Ukraine conflict affect a minority of institutions and is not a material factor to explain the persistent increase in compliance costs, which is mostly driven by keeping up with regulatory expectations. There are signs that financial institutions are upgrading their compliance approach, using more technology to improve efficiency and effectiveness.

John Reiners

Managing Editor, UK & EMEA, Thought Leadership

Ben Skelton

Lead Econometrician, Economic Consulting

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