AI tops the list of biggest threats to regulated firms this year

55 percent of regulated businesses surveyed see AI as their biggest threat this year

Over half of regulated companies in the UK see the deployment of AI as their biggest threat this year, while the evolving regulatory landscape and economic volatility top the list for 46 percent and 45 percent of businesses respectively. This is according to a survey from AML compliance software, NorthRow.

The survey, based on interviews with 127 c-suite executives and compliance officers from regulated businesses across the UK, also reveals that:

• 39 percent see regulatory and political change as their biggest challenge
• 50 percent plan to prioritise Anti Money Laundering (AML) processes this year
• 42 percent are focused on company growth this year

Andrew Doyle, CEO of NorthRow, comments: “For compliance professionals at the forefront of the fight against financial crime, the challenge has grown considerably. With new fraud and financial crime tactics, ever-changing legislation, and an increasingly challenging regulatory landscape; the crucial role of compliance has never been more pronounced.

“Our research shows that compliance professionals need to stay vigilant in understanding and adapting their strategies to counter evolving tactics that leverage AI for illicit purposes and remember that when used correctly, advanced technology has the power to optimise compliance processes and resources, automating repetitive tasks, and improving the detection and prevention of financial crime.”

Data from NorthRow also reveals that one in five regulated businesses are unaware of the penalties associated with non compliance, while 15 percent of firms have faced financial penalties for AML violations and non-compliance in the last three years alone. The average fine sits at £130,000, with the highest fine reported by a company in the banking industry which reached £2.49 million.

Doyle explains: “The cost of non-compliance is enough to shatter a business and it’s alarming just how many companies don’t understand the financial implications of non-compliance, not to mention the legal and reputational damage for both the company and its executives that comes with it.

“Compliance teams play a crucial role in helping businesses navigate this complex landscape to avoid being landed with such substantial fines so it’s no surprise more firms than ever are investing in their AML processes.”