Our survey found that most companies anticipate an increase in financial crime risks over the next 12 months and have doubts about the capacity of governments to keep pace with technological change and the increase of criminal activity. To close this gap, more than two-thirds of respondents said they were prioritizing their own technology investments. Questions remain regarding how these investments should be made and what else can be done to combat financial crime. This year’s report approaches these questions through a combination of survey results and expert commentary from Kroll’s global risk experts, focusing on anti-money laundering (AML), anti-bribery and corruption (ABC), sanctions, cryptocurrency and environmental, social and governance (ESG).
This year’s respondents represent eight countries including the U.S., the UK, France, Germany, Brazil, Mexico, Singapore and the UAE, with the vast majority working in highly regulated industries. Based on respondent insights, this report individually analyzes results at macro and micro levels and demonstrates a broad spectrum of geographies, challenges and Kroll expertise.
Thank you for spending time to review these results, and as always, Kroll is available to further discuss the details of these findings and to partner with you in improving your financial crime compliance, readiness and program objectives.
- Financial Crime Continues to Be a Leading Threat Globally
Sixty-nine percent of global executives and risk professionals surveyed expect financial crime risks to increase over the next 12 months with cybersecurity and data breaches as the primary drivers, followed by financial pressures on organizations. In the face of this dynamically evolving landscape, the role of the compliance function remains more crucial than ever.
- Organizations Are Keen to Prepare Themselves for New and Evolving Risk
Investments in technology, increase in cybersecurity budgets and undertaking more frequent business risk assessments have been cited by respondents as the three main steps that firms intend to take during the next year to combat the increase in financial crime.
- Responding to Risk by Investing in Advanced Technologies is a Priority
To counter a potential uptick in financial crime risks, two-thirds of respondents globally are planning to invest more in technology, with nearly half of respondents citing data integrity as the biggest challenge when implementing new technologies.
- Governments Are Stepping in With Increased Measures Against Financial Crime
Globally, the anticipation of increased enforcement actions is on the rise, with over 60% of survey respondents predicting an escalation in the next 12 months. Many speculate that regulatory visits will start looking more closely at the use of technology as part of firms’ AML compliance programs. Respondents agree that rapidly evolving technology is the top struggle governments face against financial crime, indicating that governments may face an uphill battle.
- AML and ABC Functions Need to Work Hand-in-hand
AML and ABC functions are distinct specializations within most financial crime compliance programs; however, they travel in the same direction and utilize similar tools, methodologies and trainings. Efficiencies can be gained when organizations intentionally seek integration by leveraging shared resources for investigations, audits and risk assessments.
- Corporations That Are Non-compliant Face Immense Financial and Reputational Consequences
Navigating the complex world of sanctions compliance is a significant challenge for multinational corporations. Forty-four percent of respondents identified geographic consistency as the top challenge for sanctions compliance programs, followed by privacy protections (39%), keeping current with changing regulations (34%) and accessibility of technological solutions to support sanctions screening (33%).
- Organizations Believe That ESG and Transparency is Crucial but Face Procedural Challenges
The recurrent theme of balancing transparency and privacy, notably in beneficial ownership, calls for cautious navigation. Likewise, in environmental, social and governance (ESG) reporting, businesses must align with evolving standards to avoid the pitfalls of greenwashing and fraud.
How Technology is Transforming AML
The incredible pace of innovation in new technology comes at a time of uncertainty caused by war, geopolitical tensions, the crypto rollercoaster, speculation in financial markets and the related increase in cybercrime and cybersecurity risks. Kroll’s 2023 Fraud and Financial Crime Report survey results show that to cut costs and improve systems and controls, companies are rushing to embrace anti-money laundering (AML) technology. This creates risks as well as opportunities.
In a global environment of evolving economic pressures, geopolitical tensions and cutting-edge technological advancements, the significance of an adaptive, tech-driven strategy in combating financial crime is more critical than ever. Our findings spotlight the importance of technological adoption in anti-money laundering efforts, alongside the complexities of customer onboarding and monitoring.
The recurrent theme of balancing transparency and privacy, notably in beneficial ownership, calls for cautious navigation. Likewise, in environmental, social and governance reporting, businesses must align with evolving standards to avoid the pitfalls of greenwashing and fraud.