Nearly Half of Financial Institutions Struggle to Recruit Qualified AML Staff, PwC Survey Finds

A survey conducted by PwC reveals that nearly half of financial institutions are encountering difficulties in recruiting staff who are suitably qualified to meet AML (anti-money laundering) regulations. The study, which surveyed 396 members of the financial industry across Europe, the Middle East, and Africa, included 10% of respondents from Luxembourg.

Among the respondents from Luxembourg, 44% reported difficulties in recruiting sufficient skilled staff to comply with various AML requirements. This percentage is significantly higher compared to the broader EU, where only 25% of respondents indicated the same problem.

Financial institutions have also noted an 18% increase in the cost of AML compliance over the past two years. A previous survey by the Luxembourg Bankers’ Association and EY in 2021 found that AML compliance costs had risen by 16% annually between 2015 and 2020.

The latest PwC survey additionally discovered that financial institutions in Luxembourg are more hesitant to adopt new AI technology compared to banks in other parts of the EU. Only 53% of Luxembourg respondents are considering the adoption of AI, in contrast to 81% across EMEA.

Luxembourg’s financial regulator, CSSF, has suggested that AI could assist financial institutions in enhancing AML compliance and reducing costs. Claude Marx, CSSF director general, remarked that many financial institutions "are not yet making optimal use of technology that would allow significant efficiency gains." He added, "As the survey also shows, many supervised entities use outdated systems when it comes to AML/CTF. This will hopefully change with new possibilities offered by powerful generative AI tools that are becoming mainstream."

In response to international criticism that Luxembourg is not doing enough to combat illicit finance, officials have recently intensified efforts to improve the country’s AML compliance. Earlier this week, Luxembourg announced the creation of a new dedicated unit within its tax office to tackle money laundering.

The Financial Action Task Force (FATF) recently assessed that Luxembourg "needs to focus more on money laundering investigations and prosecutions, asset recovery and supervision of non-profit organisations and some non-financial sectors." Senior legal officials highlighted that 400 reports on suspected financial crimes are still awaiting investigation in Luxembourg.

By fLEXI tEAM