In the UK, the deployment of artificial intelligence (AI) is perceived as the principal threat for over half of the regulated firms this year.
A survey conducted by AML compliance software provider, NorthRow, highlights that 55% of the businesses are wary of the challenges posed by AI. This concern surpasses even the evolving regulatory landscape and economic volatility, which worry 46% and 45% of the companies, respectively.
The research, drawing insights from 127 c-suite executives and compliance officers across various regulated sectors in the UK, further unveils several key concerns and priorities. Among these, 39% of the respondents are apprehensive about regulatory and political changes, while half of the surveyed firms are gearing up to focus on Anti Money Laundering (AML) processes. Additionally, 42% have earmarked company growth as a focal point for the year.
NorthRow’s CEO, Andrew Doyle, shed light on the increasing challenges faced by compliance professionals in mitigating financial crime. “For compliance professionals at the forefront of the fight against financial crime, the challenge has grown considerably. With new fraud and financial crime tactics, ever-changing legislation, and an increasingly challenging regulatory landscape; the crucial role of compliance has never been more pronounced.
“Our research shows that compliance professionals need to stay vigilant in understanding and adapting their strategies to counter evolving tactics that leverage AI for illicit purposes and remember that when used correctly, advanced technology has the power to optimise compliance processes and resources, automating repetitive tasks, and improving the detection and prevention of financial crime.”
Surprisingly, the report by NorthRow also points out a concerning lack of awareness among regulated businesses regarding the penalties for non-compliance. About 20% of the firms admitted to being unaware of the consequences, while 15% have already faced financial penalties for AML violations in the past three years. The average penalty was reported at £130,000, with the banking sector witnessing a staggering fine of £2.49m for one firm.
Doyle elaborated on the dire consequences of non-compliance, stating, “The cost of non-compliance is enough to shatter a business and it’s alarming just how many companies don’t understand the financial implications of non-compliance, not to mention the legal and reputational damage for both the company and its executives that comes with it.
“Compliance teams play a crucial role in helping businesses navigate this complex landscape to avoid being landed with such substantial fines so it’s no surprise more firms than ever are investing in their AML processes.”
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
