True Cost of Financial Crime Compliance in Indonesia Amidst COVID-19

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Increased Compliance Costs Due to COVID-19

The COVID-19 pandemic has significantly impacted the financial sector in Indonesia, leading to increased compliance costs. According to a recent study, mid/large financial institutions attributed an average of 23% of their year-on-year compliance cost increases to the pandemic.

Key Findings:

• Average increase of 23% in compliance costs due to COVID-19
• Increased alert volumes and difficulty accessing KYC/due diligence information

Challenges Faced by Financial Crime Compliance Organizations

The pandemic has led to several challenges for financial crime compliance organizations, including:

Remote Working Period Challenges:

• Difficulty accessing KYC/due diligence information
• Increased alert volumes/suspicious transactions
• Reduced productivity overall
• Delayed onboarding of new accounts

Impact on Sanctions Screening

Sanctions screening became more challenging for many firms during the pandemic. This highlights the need for organizations to adapt and find ways to overcome these challenges in order to maintain effective financial crime compliance operations.

Conclusion

The COVID-19 pandemic has had a significant impact on financial crime compliance operations in Indonesia, leading to increased costs and challenges for organizations. It is essential for organizations to prioritize financial crime compliance and implement strategies to mitigate the effects of the pandemic.