In today's economic climate, cutting costs may seem like the logical thing to do, but now's the not the time to cut your compliance budget.
Here are the three major consequences that come with non-compliance.
1. Monetary impact
Hefty fines: Supervisory bodies like the Financial Conduct Authority (FCA) take a hard line against non-compliance. Since 2018, they've handed out $11m worth of fines.
Legal: Legal fees isn't cheap. Consider the legal fees of a Senior Counsel or even just a senior barrister needed to defend these allegations.
Lost deals: PricewaterhouseCoopers found that 50% of respondents leave companies after just two bad experiences. It's real; a complex KYC onboarding process can lose you customers.
Delayed revenue: The sooner you onboard your customer, the quicker you start generating revenue. The longer it takes to onboard your customer, the longer revenue realisation is delayed. In this case, time really is money.
2. Reputational damage
Possible data breaches: Hacking pays. You're just one ransomware or bad actor breach away from a very costly incident.
The media loves a villain: Perception is everything and the internet is ruthless. One misstep can haunt a brand forever.
Lost new customers: The FCA and NCA actively use naming and shaming to discourage as a non-compliance deterrent. Bad reputations make for industry pariahs, and can lose you customers.
Disgruntled existing customers: Nobody likes being associated with disreputable companies. So even if you still do business, they certainly won't be telling others about you.
3. Operational disruption
Compliance remediation: Supervisors can enforce compliance changes before businesses may resume operating. Any pause in business operations can impact revenue flow. Now, that's costly.
Disillusioned, disengaged, disruptive: Frontline teams spend approximately 20% of their time on KYC. Assuming average salaries, that's $7800 per person lost to AML admin.
About First AML
First AML is an AML technology provider, and the maker of Source, an all-in-one AML platform. Source powers thousands of compliance experts around the globe to reduce the time and cost burden of complex and international entity KYC. Its enterprise-wide, long term approach to the KYC / CDD data lifecycle addresses time and cost challenges while minimising compliance, reputational and security risks.
Keen to find out more? Book a demo today! No time for a long demo? No problem. See what First AML can do for your business in 2 minutes – watch the short demo here.