Worldwide spending on AML and sanctions compliance by financial institutions in 2021 exceeded $200 billion (source: LexisNexis). But whilst AML compliance is a huge part of what financial firms do, it appears that criminals are still able to launder dirty money on an enormous scale. Recent money laundering scandals such as 1MDB and the Russian Laundromat have impacted some of the world’s largest and most prestigious financial institutions. As the global war on money laundering rages, we consider what practical changes might tip the scales to better favour financial institutions. Expensive, but not effective? The cost of financial crime compliance has increased exponentially over the past few decades. In recent years, perhaps inevitably, we have seen a growing questioning of whether those efforts are paying off. The effectiveness of compliance is extremely hard to measure. At a macro level, this could potentially be seen through a tangible reduction in predicate crime offences or an increase in those facing justice Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s 39
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