Financial Crime World

Financial Crime Compliance: Top Trends to Watch in 2024

The financial crime compliance landscape is ever-changing, with the risks of money laundering, cybercrime, and other illicit activities continuing to pose significant challenges for businesses and financial institutions. In this article, we examine the top financial crime compliance trends to watch in 2024, based on an assessment by LexisNexis Risk.

Real-time Monitoring

  • With the increase in global real-time transactions (up by 63.2%) and electronic transactions (accounting for 27.8% of all transactions) [1], real-time monitoring is essential for keeping up with potential fraud.
  • Navigating rapidly changing trade regulations and enforcing various sanctions is crucial.

Data and Analytics

  • As financial criminals increasingly use digital assets and marketplaces for their nefarious activities, data and analytics have become valuable strategic assets for compliance.
  • In 2024, companies are expected to invest more in sophisticated analytics such as:
    • Predictive analytics for risk forecasting
    • Customer identification processes

Wildlife Trafficking

  • Despite efforts to combat wildlife trafficking, it remains the fourth largest illegal sector globally, with revenues estimated to reach $9.5 trillion in 2023 [2].
  • Complex networks of cross-border players, a high risk-reward ratio, and the funding of other financial crimes make this issue persistent and expected to rebound to pre-pandemic levels in the coming year.

Changing Sanctions

  • Ongoing geopolitical conflicts, such as the Russia-Ukraine and Israel-Hamas conflicts, have led to a significant increase in international sanctions.
  • Keeping up with these fast-changing and complex regulations is becoming increasingly challenging for companies and financial institutions, necessitating:
    • Dynamic and continuous risk assessment
    • Automated compliance checks

Unveiling UBOs

  • Ultimate beneficiary owners (UBOs) of organizations have long been a challenge for financial crime compliance.
  • Transparency and reporting efforts, however, are making it easier to uncover their identities.
  • In 2024, companies may see more success in uncovering UBOs and using this information to mitigate risks and enhance compliance efforts.

As the financial crime landscape continues to evolve in the coming year, staying informed about these trends and best practices is crucial for organizations looking to strengthen their compliance efforts and protect their reputations.

[1] Global Real-time Transactions, eMarketer, (2020), https://www.emarketer.com/content/global-real-time-transaction-volume-2020 [2] Wildlife Trafficking Revenue Estimate, Wildlife Conservation Society, (2022), https://www.wcs.org/wildlife/wildlife-issues/wildlife-trafficking/wildlife-trafficking-facts-and-stats.aspx