UK AML compliance costs are high and set to grow at an increasing pace. Increased AML regulations, more so than criminal threats, are driving up costs. Interpreting complex legislation is time-consuming and costly. Growth in volumes of AML activity contributes to higher costs. In many cases, AML processes are costly and time-consuming. Fear of the regulator stands in the way of progress. A culture of over-cautiousness leads to over-reporting of suspicious activity, resulting in higher volumes of work. AML compliance spend is heavily skewed towards people-related costs, rather than technology. An over reliance on people renders firms vulnerable to staff attrition and human error. Is it time to redress the balance and shift compliance spend towards technology rather than people? Data and technology are already helping to reduce time and costs, but could do much more.

This report draws on our research with Oxford Economics1. We spoke to over 300 of the UK’s leading financial institutions and conducted in depth interviews to determine an accurate figure for the cost of compliance operations for UK firms, analyse trends in AML costs, and explore potential factors influencing cost behaviour. Unless otherwise referenced, any statistics in this report are taken from this research.