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
Externally imposed
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.
Internally incurred
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
Externally imposed
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.
Internally incurred
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
Externally imposed
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.
Internally incurred
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 streamlines the entire anti-money laundering onboarding and compliance process. Backed by real expertise, its cloud-based KYC Passport allows complex entities to share their verification across multiple companies and geographies, at their discretion.
Making an otherwise complex and manual onboarding process simple for clients and cost effective and compliant for businesses, First AML delivers efficiency and time savings, protecting reputations, and enabling companies to be on the right side of history in the face of global threats.
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.