Dan Wager heads Financial Crime Compliance Strategies at LexisNexis Risk Solutions. His global team focuses on identifying market opportunities, merger acquisition opportunities, regulatory developments, and product development in the areas of anti-bribery, anti-corruption, money laundering, sanctions screening, and sanctions enforcement. He joins Tom Fox on this week’s show to chat about the key findings of LexisNexis’ report, The True Cost of Financial Crimes, and its implications for compliance professionals.

Understanding Financial Crime

“One of the things I’m trying to do,” Tom tells Dan, “is bring people like yourself on the podcast to really help the anti-corruption compliance specialist who’s in the commercial corporation understand financial crimes.” Dan comments that LexisNexis has been doing this report for five years but at the regional level. This report, by contrast, is a global roll-up overview, where they are bringing the regional studies together into a global view, to see the true cost as well as challenges and trends facing the industry.

Key Insights

Dan and Tom discuss the key findings from the report, including:

  • The true cost of compliance globally is in excess of $180 billion a year.
  • Each region has its own compliance risks and issues.
  • Non-bank payment providers pose various compliance challenges, in particular for clearing banks.
  • The increasing compliance burden has an adverse impact on attracting and retaining talent.
  • The proper use of the right technologies can assist in offsetting costs and making better compliance decisions.

A Layered Approach to Compliance 

Using a layered approach helps a compliance professional think through the risk management of their compliance program, recognizing that implementing financial crime compliance initiatives can provide broader benefits to their business. Dan explains that the layered approach to compliance starts at the front gate, and it involves using technology to determine whether the person or proposed action poses a compliance risk. “The layered approach means before you spend something on someone or give money to someone or buy something from someone you should have vetted them,” he points out. Tom asks about page 45 of the report. Dan says that it’s about using the right technology for your business’ needs. That is what will reduce labor cost, he points out. “It doesn’t mean that you can hire cheaper labor. It means you have fewer people to accomplish the same compliance because you’re automating and accomplishing through technology much of the rote work.”

Resources

LexisNexis Risk Solutions

Study: The True Cost of Financial Crimes