Over the years, there has been a significant increase in regulations, specifically in the financial services industry, to curb the illicit activities that aid corruption, money laundering, and sanctions-busting. These regulations have particularly increased in the aftermath of the 2008 financial crisis, causing banks to hire additional compliance staff. At one of the major U.S. banks, the compliance staff has increased from 4% of the workforce in 2008 to 15% of the workforce in 2019.
Despite increasing efforts on the parts of financial institutions to maintain compliance with regulations and curb illicit behavior, major entities have been caught on the wrong side of these regulations and have been fined — be it for banking Mexican drug money or breaches of Russian sanctions, causing financial institutions to seek to be rescued by technology. The financial institutions that adopt innovative new technologies and techniques to address regulatory compliance demands will be industry leaders for years to come.