HFS Research has partnered with AML RightSource in order to release a study on individuals and teach imperatives that drive new automation in fincrime compliance. While financial services firms and companies represent extensive adopters of optimised technologies, multiple other challenges and barriers remain present in their process of development, including the presence of skilled employees, organisational silos, and lack of C-suite support.

At the same time, institutions also face difficulties in incorporating artificial intelligence (AI) and automation in financial crime (fincrime) programmes. HFS Research and AML RightSource released a new study, entitled ` Driving the Evolution of Financial Crime Compliance: The People and Tech Imperative`, which showed that 18% of fincrime compliance leaders are currently using AI and automation in their suite of solutions. With the leverage of planned adoption being expected to increase by more than 70% in the next 2 years, the fincrime compliance firms are expected to be enabled to face new people and tech imperative in a secure and efficient manner.

More information on the study The survey-based study was based on the responses of 500 fincrime compliance professionals across the region of North America, the UK, Europe, and Asia-Pacific. Through this study, both HFS Research and AML RightSource aimed to develop a definitive baseline and a clear vision of needs and financial solutions for financial crime firms in order to incorporate automation, AI, and outsourcing. As regulatory requirements and expectations are expanding rapidly in the industry, compliance functions are under a lot of pressure to adapt to the current risks of the more interconnected and digitised landscape at scale and with speed.

Under these circumstances, financial services companies and firms are showing an optimised willingness to invest in regulatory risk and compliance programs. The study also includes insights on the biggest internal challenges for fincrime compliance programs (such as talent, organisational silor, and lack of secure C-suite support) amid improved innovation, fraudsters, and financial criminals, as well as the overall rapidly changing financial transaction models. At the same time, information on compliance organisations is currently expecting their budgets to increase by 9.5% in 2024, while many regular compliance firms (41%) believe that the easier path to artificial intelligence and automation adoption is represented by their existing platforms and systems.

Using service providers and building in-house also represent viable alternatives. In addition, there is a broad consistency around what regulatory compliance companies want to outsource and exactly what they want to apply AI and automation to. The overall alignment is situated as an important step in tech-enabled managed tools.

The study also highlighted how, although the most typical model of working with third-party solution providers is represented on a project basis, in the following two years this is expected to shift to tech-enabled managed tools. Tech-enabled fincrime compliance workloads will also grow by 31% over the next two years, compared to the more modest development in human-led work. At the same time, the study mentioned that currently there are not enough financial crime professionals to meet new requirements and manage remediation or enforcement against fincrime.

Thus, the resources are expected to be amplified and augmented by AI and automation in order to increase the time spent on judgment-based requirements and strategic decisions. In addition, it is set to minimise time spent on routine repetition and documentation. .