Contents
Bear the costs… or turn them into a competitive advantage
The accounting approach: compliance, a necessary evil
The managerial approach: optimizing costs and processes
The strategic approach: compliance as a lever for value creation
A cultural shift… and technological investments are essential
Regulatory inflation affects all businesses. In sensitive sectors, such as anti-money laundering and counter-terrorist financing, requirements are particularly strict due to the significant financial stakes, and compliance audits are frequent. For many organizations, the costs associated with meeting these obligations quickly become significant. Remediation costs following a major AML violation can reach $50 million to $100 million for a large bank. As a concrete example, TD Bank was ordered in October 2024 to pay cumulative penalties exceeding $3 billion, marking the largest AML penalty in U.S. history and subjecting the bank to several years of independent oversight.
Swallow the costs… or turn them into a competitive advantage?
So much so that they are increasingly seen as a growing burden. Setting aside from the outset the (suicidal…) temptation to prioritize partial or total non-compliance in order to save money, there are three approaches to addressing this issue. First, compliance costs can be viewed as mandatory expenses, a sort of compulsory levy that cannot be avoided. This is the accounting approach, in which compliance expenses are treated in the same way as other expenses. Second, costs can be viewed as an expense that can, however, be optimized to curb their rise. This is the managerial approach, which is based on the idea that processes can always be optimized to make compliance costs less of a burden on companies’ operating accounts. Finally, compliance costs can be viewed as levers for value creation. This is a strategic approach, in which the long-term vision takes precedence and compliance costs are viewed as value-adding investments.
The Accounting Approach: Compliance, a Necessary Evil
In companies that prioritize the accounting approach, compliance is viewed as an unavoidable external constraint. It is treated as a cost: you have to pay to stay in compliance—no more, no less.
Just checking the boxes: a false sense of security
This is the era of what the English-speaking world calls “ Tick the Box ”: compliance management boils down to “ticking the boxes” required by regulations, without further consideration of how to optimize and create value. This approach has two advantages: on the one hand, operational simplicity, insofar as the company simply applies the regulations. On the other hand, investments are limited, particularly in automation and process transformation.
Reacting instead of anticipating
But this accounting-based approach also has two major drawbacks: the first is that compliance is viewed as an obstacle by operational teams. It can hinder the development of new transformation projects. The second is that, by adopting a purely reactive stance, the company is subjected to legislative changes rather than anticipating them, which can lead to costly crises and foster a false sense of security or compliance throughout the organization.
The managerial approach: optimizing costs and processes
With this approach, companies move from a situation of “reactive compliance” to one of “proactive compliance.” It is integrated into business processes.
A beneficial improvement… but not enough
The company is thus seeking to streamline compliance costs by automating controls and centralizing data, using appropriate technologies, particularly those offered by Regtech firms. Benefits: increased efficiency, with a reduction in administrative, manual, and time-consuming tasks, as well as greater visibility through management dashboards and better control of operational risks.
"How" is fine, but "why it's better" is even better!
But while this approach may seem more meaningful than a purely accounting-based view of compliance, it can lead to a certain rigidity if companies focus on constant optimization at the expense of a long-term perspective: managing the “how” can sometimes cause us to lose sight of the “why”!
The Strategic Approach: Compliance as a Driver of Value Creation
Compliance is fully integrated into strategic planning. Costs are viewed as investments that enhance the value of the company’s assets.
Compliance to Boost Sales
It has even become a selling point and a cornerstone of the brand. Compliance is no longer just another item on the legal department’s agenda; it’s a selling point. In other words, companies do not comply standards and regulations because they are required to, but because doing so builds trust among customers, investors, partners, and employees.
Legal Services for Value Creation
As a result, the company stands out for its integrity in the fight against money laundering, corruption, and terrorist financing. Furthermore, regulatory constraints are becoming a source of creativity for developing new, more sustainable or ethical products. The challenge is to transform a “legal obligation” into a “strategic asset.”
A CULTURAL SHIFT… AND TECHNOLOGICAL INVESTMENTS ARE NEEDED
This strategic approach—the most effective one—requires a significant cultural shift and the full commitment of senior leadership, management, and all employees. Compliance can no longer be the sole responsibility of a single legal team; it must permeate the entire organization, from the front office to support functions. But culture alone is not enough. For compliance to truly become a strategic asset, it must be supported by technologies capable of making it productive, traceable, and explainable. This is precisely where the choice of tools becomes decisive. In the field of AML-CFT, for example, the requirements—such as identifying persons of interest, scoring client risks, monitoring transactions, and screening against international sanctions—are such that manual or partially automated management quickly reaches its limits. False positives pile up, teams burn out on time-consuming tasks, and the traceability required in the event of an audit becomes difficult to guarantee. It is with this in mind that AP Solutions IO has designed a suite of solutions intended not merely to “check boxes,” but to transform compliance into a driver of sustainable performance. With over 90 configurable criteria, its tools adapt to each organization’s risk policy and automatically evolve with regulations, without requiring technical intervention. Ultimately, moving from compliance as a burden to compliance that creates value is not just a matter of managerial will. It is also a matter of proven technological solutions. Together, they make compliance what it should always be: a sign of trust for customers, partners, and regulators.
Aurélien Zachayus
Co-Founder – CEO at AP Solutions IO
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