5 ways Asia-Pacific organisations can reduce compliance costs

5 ways Asia-Pacific organisations can reduce compliance...The regulatory environment across the Asia-Pacific region is becoming increasingly onerous, particularly in relation to anti-money laundering (AML).


Last month, we explored how AML laws are spurring a compliance drive across the region.


Figures from LexisNexis show banks in Thailand, China, Indonesia, Hong Kong, Malaysia and Singapore spend approximately $1.5 billion a year to cover AML regulations – and this is just one area of compliance.

Asia-Pacific’s ballooning compliance costs

Jayant Raman, principal at Oliver Wyman’s finance and risk practice, wrote in an article for Brink Asia that his firm’s data revealed 86 per cent of financial institutions reported dramatic increases in compliance costs.


A couple of Singaporean banks claimed they had been spending between 20 and 35 per cent more every year from 2005 to 2016.


But what can organisations do to optimise their compliance spending without compromising quality? Mr Raman provided some helpful tips on how to get the best out of compliance budgets.

1/ Invest in new technologies

Big data, RegTech and artificial intelligence are just some of the innovative technologies that are helping organisations automate laborious compliance processes.


Departments must become adept at identifying the right systems for their needs and implementing them in the correct manner. However, even the most innovative technologies require skilled professionals to fully leverage these opportunities, so effective hiring and training procedures should be in place.

2/ Remove redundant processes

According to Mr Raman, Asian financial institutions will inevitably encounter duplication across compliance activities as the business grows in size and complexity. He said organisations could avoid redundancy by:

  • Turning processes into utilities that support the wider risk agenda;
  • Mapping each process to requirements to identify overlap; and
  • Centrally coordinating control identification, execution, testing and reporting.

3/ Ensure a forward-looking approach to compliance

Asian organisations must take a proactive rather than a reactive approach to compliance improvement. Identifying the risks of tomorrow and evolving processes ahead of time will ensure the business is future-proofed.


“This includes embedding data science into the organisation; frequently war-gaming to identify new emerging risks; moving fast and becoming more agile; and raising awareness and building governance over new advanced capabilities,” said Mr Raman.

4/ Consider human resource optimisation

Human resource optimisation can help businesses make savings while still maintaining a highly qualified workforce. With the right approach, firms can boost productivity and ensure better oversight over compliance functions.


There are several ways to optimise departments, including nearshoring and offshoring activities, utilising contractors effectively, and training the workforce to operate in a non-siloed way as a best practice technique.

5/ Retain skilled staff

Replacing senior compliance professionals can be a costly exercise, both in terms of recruitment expenses and more intangible losses such as brain drain. A recent Thomson Reuters report revealed compliance staff retention is a key challenge for Asian businesses in the current regulatory climate.


“In the coming years, there may very well be a shortage of high-calibre compliance professionals, and institutions will have to do a lot more than they have done in the past to retain the best talent,” said Niall Coburn, senior regulatory intelligence expert at Thomson Reuters.


Clearly, businesses across the Asia-Pacific region face a number of compliance challenges over the coming years. They must often balance the increasing expectations of boards with the ongoing pressure of ensuring budgets don’t spiral out of control.


If you need help strengthening your compliance departments in Asia, please contact a consultant at Barclay Simpson to discuss your requirements.


Our 2017 Compensation and Market Trends Report combines our review of the prevailing conditions in the compliance recruitment market together with the results of our latest employer survey.


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