Driving the evolution of financial crime compliance: The people and tech imperative

Financial crime (fincrime) compliance programs have a people problem. The people are great—hardworking subject matter experts fighting financial crime and ensuring the reputational integrity of their firms through compliance. However, there are often not enough of them to meet new requirements, let alone manage remediation or enforcement actions.

HFS’ research shows that financial services firms have been some of the earliest and most extensive adopters of automation, AI, and outsourcing. However, fincrime compliance leaders are isolated from the investment—perhaps intentionally so, favoring less-risky, people-driven compliance rigor over innovation-enabled efficiency. But scaling capabilities using people alone is tough. These fantastic fincrime compliance resources need to be amplified and augmented by AI, automation, and outsourcing to help increase the time spent on judgment-based requirements and strategic decisions and minimize the time spent on rote repetition and documentation. It is essential to get this balance between people and tech right. This is the people and tech imperative.

The good news is that fincrime compliance leaders want to make massive strides with AI and automation. The bad news is they have a heck of a long way to go.

Creating a baseline for the future of fincrime compliance

HFS Research, in partnership with AML RightSource, conducted a survey-based study to create a definitive baseline and a clear future vision of the wants and needs of financial services fincrime compliance professionals for automation, AI, and outsourcing. The study covered 500 financial crime compliance and risk leaders in Tier 1, 2, and 3 financial institutions, cooperative banks, payment providers, and non-bank financial institutions in North America, the UK, Europe, and Asia Pacific.

We complemented the survey with in-depth interviews with senior financial crime, compliance, and risk leaders in leading financial institutions and fintechs to validate and give us their perspectives on the survey findings.

Fincrime compliance leaders weigh in on challenges, budgets, outsourcing, and AI

Major findings include

For reference, the technologies underpinning our use of the term “AI and automation” include robotic process automation (RPA), intelligent document processing (IDP), process and task mining, machine learning, generative artificial intelligence (GenAI), predictive and prescriptive analytics, low-code/no-code platforms, and APIs. In the context of this research, we use the phrase to connate critical technologies that can complement and extend the capabilities of fincrime compliance professionals.

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