Rethinking Financial Crimes Compliance with the CDE Paradigm: Complexity, Data, and Effectiveness
- FinScan
- 2 days ago
- 3 min read
As the regulatory and geopolitical landscape grows more volatile, financial institutions face mounting pressure to not only comply with the rules—but to ensure that compliance is effective. In a recent webinar hosted by FinScan, Steve Marshall (Director, FinScan Advisory Services) and Bob Skrzypczak (Managing Director, Head of Financial Crimes Compliance at Natixis CIB) unpacked the growing shift away from “check-the-box” compliance to a more agile, data-driven approach rooted in three key dimensions: Complexity, Data, and Effectiveness (CDE).
Here are five key insights from the discussion.
1. Complexity is the new normal—and it's multi-dimensional
The complexity of financial crimes compliance isn’t just about regulatory sprawl. It’s about navigating conflicting global requirements, overlapping sanctions regimes, the growing reach of trade restrictions, and the multi-layered demands of AML—from KYC to risk scoring. It’s about evolving political and trade dynamics, and all the dependencies on front-line teams, third-party data sources, and legacy IT systems.
As Bob noted, “Complexity often stems from what you don’t directly control,” underscoring the need for tighter collaboration across business units, compliance, and IT. Internal coordination is crucial to reinforce a culture of control and reduce complexity throughout the organization.
2. Data quality isn’t just a technical issue; it’s a compliance imperative
Effective financial crime detection starts with clean, well-governed data. But high-quality data must be relevant to the risk at hand, timely in its capture and refresh, and accurate and complete throughout its lifecycle.
Both speakers emphasized the need to identify and govern critical data elements—especially in KYC, transaction monitoring, and customer risk scoring. Data lineage and fitness-for-purpose validation are no longer nice-to-haves; they’re table stakes for risk mitigation.
3. Effectiveness means going beyond the checklist
The heart of the conversation centered on a core question: Is your compliance program truly effective, or just exam-ready?
A completed checklist doesn’t necessarily mean a crime was prevented. Instead, institutions must align controls with actual business risk and develop measurable KRIs and KPIs to monitor program performance. They must also leverage insights from SARs, 314(a) matches, and regulatory feedback to refine their approach.
As Steve Marshall put it, “If all you’ve got is documentation, you may not have an effective program.”
4. Technology can drive effectiveness, but only if deployed intentionally
AI and automation hold real promise, especially in handling repetitive tasks like periodic KYC reviews. But tools must be evaluated based on their alignment with institutional risk, resource capacity, and the explainability and transparency of their outputs. It’s also based on the governance and model risk management (MRM) applied to their implementation.
AI is not a silver bullet. As the speakers stressed, using a “bat to kill a fly” can lead to wasted resources and new compliance risks.
5. Building strong relationships across functions is non-negotiable
Compliance teams cannot work in silos. Whether it’s IT, data owners, or front-line business leaders, collaboration is essential to understand customer relationships and risk exposure, identify gaps in data collection and onboarding, and respond quickly to regulatory changes or emerging threats.
“Knowing your criminal,” as the speakers joked, begins with knowing your organization—and building trusted relationships across its moving parts.
Where we go from here
The future of financial crime prevention isn’t about ticking boxes. It’s about mastering complexity, elevating data quality, and driving real effectiveness. That shift requires more than tools. It demands a strategic, risk-aligned mindset grounded in cross-functional cooperation and continuous improvement.
Did you miss the webinar?
The CDE’s of Modern Financial Crimes Prevention: Complexity, Data and Effectiveness
