Consulting Report

24 Jul 2024

The True Cost of Compliance

In collaboration with LexisNexis.

This report updates last years’ research on the detection and prevention of financial crime, and it’s cost to the UK financial services sector. We surveyed 254 senior compliance executives about their costs and compliance activities, and extrapolated the 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.

The study found compliance costs rose by double digits (12%) in 2023, with the vast majority (95%) of firms reporting an increase. Just 2% said costs had fallen. It means that collectively, the sector is now spending an astronomical £38.3 billion on compliance each year, equivalent to Estonia’s GDP. Costs have risen by nearly a third (33%) since 2021 – well above the rate of inflation – yet the NCA estimates that at least £36bn is laundered in the UK each year. Other key findings from the research include.

• 98% of firms have either already implemented or plan to adopt AI and machine learning analytical tools into financial crime screening processes by 2026.

• UK banks and fintechs spend £21.4k per hour fighting financial crime and fraud, pushing the UK’s annual compliance bill to £38.3bn.

• Rapid investment in technology and rising customer volumes are cited as key cost drivers.

To download the report, please complete the form below.

Anubhav Mohanty

Associate Director, Economic Consulting

Ben Skelton

Lead Econometrician, Economic Consulting

John Reiners

Managing Editor, Thought Leadership

Harry Pickford

Economist, Economic Impact

Maximilian Vickers

Research Associate

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