Financial crime may carry 7-digit price tag for over 30% of financial sector firms

Financial crime may be hitting as many as 30 percent of firms in the financial sector to the tune of £1 million or more, a survey by compliance software maker Themis and Encompass showed.

The estimated price tag included both direct and indirect costs of financial crime, but the survey shows industry leaders focused closely on direct costs which may not prove the most damaging, authors of the white paper wrote.

Some 36 percent of survey participants named direct financial losses as their "primary concern," with 32 percent citing reputational costs to incidents and only 15 percent citing follow up regulatory fines as the top worry.

But regulatory action poses "the most obvious, immediate and sometimes the most severe impact" to balance sheets, authors warned, citing a £40 million fine in 20209 by the UK's FCA or a €480 million settlement by ABN Amro in the Netherlands.

“Clearly, many finance professionals still perceive a ‘criminals’ take’ as the biggest cause for monetary loss year after year," Henry Balani, global head of industry & regulatory affairs for Encompass Corporation, said.  "There are far more hidden costs than to financial non-compliance, than one might initially realize."

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