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Causal Capital ~ The Knowledge Capital Specialists

Reduce the cost of compliance

Causal Capital will be delivering an Anti-Money Laundering Risk Profiling Masterclass in Singapore and Jakarta that passes across to attendees an online compliance database to help AML teams improve the coverage and effectiveness of their compliance programs [LINK].


The annual Thomson Reuters report for the cost of compliance is out and from a budget, knowledge, resource and requirements perspective, the picture is looking rather bleak in the banking sector.

Costs are expected to rise, especially in Asia and the Guff. Compliance teams have assessed themselves as not having enough skilled resources and prudential demands, specifically from local regulators are also up. When you consider the combined effect of these internal and external factors putting pressure on the banking community, compliance teams' capabilities are being stretched.

The Cost of Compliance 2016 | Thomson Reuters [LINK]

Perhaps one of the emerging trends, a hope at the moment in compliance and audit for what it's worth, is an interest to move the core game away from Tickbox Compliance and towards Risk Based Compliance or Risk Based Audit equivalently.

A 'Risk Based Approach' to compliance and AML work will result in compliance processes being applied in a contextually sensitive manner to the contract and processes that underpin every banking transaction that requires monitoring.

This won't happen unless there is an investment of time and money into infrastructure and training of staff operating these compliance functions. All this said, I believe that if Risk Based Compliance methods are adopted properly including the ideology under them, there are wonderful benefits to be harvested in the long run. It is possible to achieve a higher compliance coverage for a lower unit of cost.

On the surface this probably seems like a bit of an impossibility, that is; we achieve a higher compliance coverage for a lower cost and the Reuters reports each year paints a very contrasting picture of ever escalating compliance charges and a stale baseline of improvement.

So what is wrong with compliance frameworks in banking?

Please feel free to comment but over the coming months ahead, Causal Capital will be releasing a lot of exciting products and training programs for our banking clients including:

[1] A Risk Based Compliance framework and

[2] An Anti-Money Laundering profiling database

I recommend taking a look at the Reuters report [LINK], an outstanding piece of work as always and if you are a banker seeing the costs rise, take some solace in the fact that you won't be alone.

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