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Luxembourg Must Step Up Efforts to Combat Financial Crime as Competition Intensifies

A recent survey by PwC has highlighted the challenges faced by Luxembourg in combating financial crime, with respondents citing increased costs and a lack of skilled staff among their biggest concerns.

Survey Findings

• 69% of Luxembourg respondents have seen their anti-money laundering (AML) costs increase by at least 10%.
• 31% have seen their AML costs rise by at least 30%.
• Only 13% of respondents have implemented cloud solutions, compared to 53% in EMEA.
• 38% of respondents claim their systems are “outdated”, making it difficult for them to adopt newer technologies such as artificial intelligence (AI).

Challenges Facing Luxembourg

• Recruiting skilled staff is a major challenge for Luxembourg’s financial institutions. According to the survey:
  • 44% of respondents cite recruiting AML professionals as one of their biggest operational challenges.
  • Salary packages are the main impediment (31%).
• The country must also address its legacy operating systems, which are hindering the adoption of newer technologies such as AI.

Comparison with EMEA and EU

• In contrast, EMEA and EU respondents are more willing to invest in new digital tools:
  • 56% allocate over 10% of their budget for such purposes.
• Luxembourg’s financial institutions must also be more proactive in adopting new technologies if they are to remain competitive.

Recommendations

• The PwC survey highlights the need for Luxembourg’s financial sector to improve its AML effectiveness through increased investment in technology and staff training.
• To support Luxembourg’s efforts, PwC has developed an AML benchmarking tool that provides organisations with unique insights on regulations, operations, and technology in the EMEA AML market.

This tool enables organisations to compare their performance against industry peers and make informed decisions about how to improve their AML effectiveness.