Financial firms ‘need to do more’ on AML
A survey has found that less than half of Irish financial institutions expect to be fully compliant with new AML (anti-money-laundering) requirements by July next year.
Business-services group PwC carried out the survey of 500 institutions across 40 European countries.
The EU’s AML package, set to take effect in July 2027, introduces a new operational and supervisory framework that, according to PwC, “even the most sophisticated financial institutions are finding challenging to comply with”.
Compliance burden
The survey shows that over half (53%) of Irish financial institutions expect to see a significant uplift in their compliance burden beyond current AML capacities, with almost one-third expecting compliance costs to jump by up to 30%.
Only 43% expect to be fully compliant with the new requirements by next July – although this is well above the survey average of 33% across Europe.
PwC finds that only 31% of Irish institutions say that they have completed both a detailed regulatory analysis and an impact assessment.
Its survey finds that customer due diligence (CDD) is the most pressing operational challenge in Ireland across Europe, with 80% of Irish respondents only partially aligned with the draft CDD Regulatory Technical Standards requirements.
‘Heightened risk’
Asked about their main concerns on AML requirements, 61% of Irish firms cited ‘excessive data collection’, while 53% were most concerned about a shift towards a rules-based over risk-based approach.
Muireann O’Keeffe (AML director, PwC Ireland) said that Irish financial institutions needed to do more to prepare for the new AML rules.
“The survey findings suggest that Irish firms, despite operating at the centre of EU financial activity, may face heightened risk of non-compliance unless they accelerate implementation efforts in the coming 12 months,” she stated.
Referring to a finding that 37% of Irish firms are experiencing a shortage of qualified staff, O’Keeffe added: “Financial institutions are caught in a cycle where rising regulatory expectations require more resources, yet the availability of appropriately qualified staff remains limited.”