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:
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61% of European banks cite increased competition from new entrants as a driver of sharper risk and compliance investment
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51% struggle to plan strategy amid volatility, and 42% report decisions slowed by fragmented data and internal misalignment
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70% of compliance teams are investing in regulatory compliance and 48% in governance — the highest of any region
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“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. What is distinctive is European banking leaders are competing through sharper risk management and stronger compliance. They also treat the fight against fraud and financial crime as a priority in its own right.
“Legacy systems and fragmented data slow decisions and weaken competitiveness. Across Europe, banks are responding with targeted investment in AI, data and analytics. The aim is to build an integrated, cross-functional view of risk while strengthening governance, explainability and human oversight in line with regulatory expectations. The goal may be consistent across markets, but Europe is taking a distinct path to compete at pace.”
The full report is available via this link.
“European banks pour into risk, compliance and AI to compete: Moody’s” was originally created and published by Retail Banker International, a GlobalData owned brand.