The damage to society
Financial crime has a direct link to terrorism, human trafficking, drugs trafficking and illegal arms dealing. The cost of executing the Paris terrorist attacks in 2015 was just $10,000, yet the tragic loss of life, damage to the Paris economy (an estimated $2.1 billion) and the geopolitical repercussions were catastrophic. Human trafficking is a $150 billion global industry and a third of all victims are children. Global illicit drug sales are reportedly worth around $360 billion a year, and the illegal arms trade is worth an estimated $10 billion a year.
Arguably every country in the world will have been affected by these crimes and addressing financial crime sits high on the political agenda.
There is a social, political and regulatory imperative for financial institutions to take diligent and rigorous steps to mitigate financial crime risks, and prevent the creation of any business environment that allows these crimes to thrive.
Reducing the impact on the bottom line
Fines and sanctions have a significant financial impact on institutions that fail to comply with the regulations. While global firms can budget for the liability in some cases, smaller institutions or newer entrants will struggle to absorb these fines and/or allocate the appropriate funds to adequately fix the issue.