Fraud and financial crime have become the sharpest edge of the pressure for ramp up risk management and compliance investment, according to Moodys.
Some 66% of European banks cite rising fraud and sanction enforcement as a challenge, well above the US (44%) and APAC (54%), pushing banks to invest in AI-driven screening that catches more crime while clearing legitimate customers faster
The Moody’s report, entitled The European Edge: How the region’s banks are competing through risk, compliance and trusted data, concludes that Europe favours gradual, governed AI augmentation with human-in-the-loop oversight, rather than full automation, to satisfy regulators. Report takeaways include: – 61% of European banks cite increased competition from new entrants as a driver of sharper risk and compliance investment – 51% struggle to plan strategy amid volatility, and 42% report decisions slowed by fragmented data and internal misalignment – 70% of compliance teams are investing in regulatory compliance and 48% in governance — the highest of any region – “Banking has always been a business built on judgment: assessing risk, pricing credit and allocating capital. What has changed is the speed required,” said Andrew Bockelman Head of Banking Moody’s.
The quality of judgment still matters, but institutions that act faster often gain an advantage. They connect insight to action more quickly, apply decisions across functions with greater consistency. Research with 348 senior banking decision-makers confirms that this pressure is universal.