Joint Comment Letter: CFES, AFC, FinCEN Survey of the Costs of AML/CFT Compliance

December 1, 2025
Financial Crimes Enforcement Network Department of the Treasury
P.O. Box 39
Vienna, VA 22183

Re: Survey of the Costs of AML/CFT Compliance

To Whom It May Concern,

The Coalition for Financial Ecosystem Standards (CFES) and the American Fintech Council (AFC) appreciate the opportunity to provide input regarding the Financial Crimes Enforcement Network’s (FinCEN) Survey of the Costs of AML/CFT Compliance. Rather than responding solely through the survey instrument, this letter provides consolidated feedback from our member institutions and professionals. We understand that the survey is being conducted under FinCEN’s authority to assess the economic, operational, and administrative impacts associated with compliance obligations under the Bank Secrecy Act and related AML/CFT frameworks. Our comments are intended to inform FinCEN’s evaluation of the proper cost drivers of compliance across institutions of varying size, complexity, and business models, and to highlight systemic challenges and opportunities for more risk-aligned, efficient regulation.

CFES supports responsible growth and innovation in digital financial services through industry-led standards development. Our coalition represents nearly 20 members, comprising leading fintechs, digital asset entities, and community banks. Our work has been covered by Forbes, American Banker, and Politico, and we engage regularly with prudential regulators at the federal and state levels. Our members share a commitment to maintaining strong AML/CFT controls while ensuring that regulatory expectations remain risk-aligned, transparent, and operationally feasible.

AFC’s mission is to promote an innovative, transparent, inclusive, and customer-centric financial system by fostering responsible innovation in financial services and encouraging sound public policy.

AFC members are at the forefront of fostering competition in consumer finance and pioneering ways to better serve underserved consumer segments and geographies. Our members are also improving access to financial services and increasing overall competition in the financial services industry by supporting the responsible growth of lending and lowering the cost of financial transactions, allowing them to help meet demand for high-quality, affordable financial products.1

To support this submission, CFES and AFC collaborated to conduct a joint member survey in November 2025. The survey gathered quantitative and qualitative data from CFES and AFC members on

AML/CFT expenditures, staffing needs, vendor costs, technology investments, and key compliance challenges. The comments that follow reflect aggregated insights from participating institutions and demonstrate the significant financial and operational burdens imposed by current AML/CFT compliance requirements.

Overview of Respondent Profile‍

Survey respondents represented a diverse range of institution sizes and business models. Participating organizations range from early-stage fintech companies to established financial institutions employing several thousand staff.

● The largest concentration of respondents fell between 50 and 499 employees

● Additional respondents included firms with fewer than 50 employees and three institutions with 1,000-4,999 employees.

This distribution provided insight into how AML/CFT compliance costs scale across varying institution sizes, particularly in the mid-market segment.

Scale and Burden of AML/CFT Personnel Costs‍

Personnel remains the most significant component of compliance spending for CFES and AFC members. Survey results show:

● Nearly 40% of respondents report personnel costs exceeding $1 million annually, with several institutions reporting costs exceeding $5 million.

● Even among smaller institutions, personnel expenses routinely exceed $250,000 annually, reflecting the high resource demands of maintaining monitoring, reporting, review, and audit processes.

● Multiple institutions cited the continued expansion of regulatory expectations as the primary driver of increasing labor costs, particularly the need to staff complex alert review, onboarding, transaction monitoring, audit readiness, and SAR drafting functions.

Across the membership, respondents emphasized that personnel obligations have grown steadily, and in many cases disproportionately relative to risk exposure and portfolio size, in part due to supervisory expectations that place procedural staffing ahead of technology-enabled or outcome-oriented approaches. Members noted that a clearer supervisory framework that encourages the use of modern software, analytics, and AI could help institutions manage rising costs while maintaining, and in many cases improving, the effectiveness of AML/CFT programs.

Technology Spend is Significant and Widely Increasing

Technology and vendor expenditures represent the second-largest cost category for respondents. Our updated data indicates that:

● More than half of our respondents report annual AML/CFT technology and vendor costs of $1 million or more, with several exceeding $2.5 million.

● Only a small minority of respondents report spending under $250,000 per year.

● Many financial institutions continue to invest heavily in additional monitoring systems, automated reporting tools, analytics platforms, screening vendors for sanctions, case management systems, and regulatory reporting interfaces.

Notably, 75% of respondents identified transaction monitoring as their single largest compliance expense, driven by both staffing requirements and system costs.

These trends suggest that technology costs have become a permanent, escalating baseline for AML/CFT compliance, increasingly driven by regulatory expectations rather than business choice. Members noted that new system requirements often require substantial spending to maintain alignment with supervisory expectations, even when improvements in detection or operational efficiency are limited with many institutions observing that the current examinations focus more on process conformity than measurable outcomes. Respondents emphasized that shifting toward a more outcome-based supervisory approach could allow technology investments to be better optimized for actual risk reductions rather than compliance -driven spend.

Operational Challenges and Bottlenecks

Members identified several sources of disproportionate operational burden, including:

● Manual or repetitive SAR and alert workflows that require large, dedicated review teams.

● Difficulty integrating multiple vendor systems and datasets into a single investigative and reporting platform.

● Resource-intensive audits and examinations are particularly challenging when expectations vary between agencies or examiners.

● Inconsistent or unclear regulatory expectations lead to delays and increased costs.

● Lack of clear benchmarks on what constitutes strong performance

Respondents emphasized that while technology investment is substantial, the benefits are often constrained by implementation burdens, lack of interoperable regulatory data standards, and the need to continue staffing large frontline review teams.

Evolving Risks and System Limitations

Members also note that many existing compliance systems were built for legacy business models and a paper-based world which may not adapt easily to emerging payment channels, fintech products, or changes in regulatory expectations. Revalidating or replacing these existing systems requires significant investment, frequently accompanied by additional consulting, testing, and legal review. These expenditures are often undertaken without a corresponding feedback loop that helps institutions understand where their efforts and reporting lead to measurable enforcement outcomes or intelligence value.

Value of Data-Driven Regulatory Policy

The CFES and AFC Joint Member Survey results strongly suggest the importance of FinCEN’s efforts to build a more empirical understanding of compliance cost structures. Member institutions express the view that:

● Policy reforms grounded in digital reality with an outcome-based approach are more likely to reduce unnecessary burden without compromising national security outcomes.

● Better standardization of data transmission, reporting formats, and examiner expectations could meaningfully reduce operational waste.

● Regulatory frameworks should provide space for modernization, including automation and feedback loops to measure whether filings drive tangible enforcement value.

CFES and AFCencourage FinCEN to continue incorporating quantitative findings into future guidance, rulemaking, and supervisory direction to ensure that requirements produce measurable risk reduction rather than administrative volume. As discussed in previous advocacy, we urge FinCEN to investigate ways to incorporate innovative tools and processes into their supervisory activities.2 Relatedly, we encourage FinCEN, through its engagement with prudential banking regulators, to enable and incentivize the use of regulatory technology tools by innovative banks and their fintech partners to diminish AML costs while improving their BSA compliance.

CFES and AFC Commitment to Continued Engagement

CFES and AFC appreciate FinCEN’s commitment to gathering data directly from industry stakeholders. Our coalition will continue to refine these findings in partnership with our members and stand ready to provide additional feedback as needed.

We welcome continued dialogue and collaboration to strengthen national financial integrity systems while ensuring compliance obligations remain operational, reasonable, risk-aligned, and innovation-compatible.

Sincerely,

Coalition for Financial Ecosystem Standards (CFES) and American Fintech Council (AFC)

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1 American Fintech Council’s (AFC) membership spans earned wage access (EWA) providers, lenders, banks, payments providers, loan servicers, credit bureaus, and personal financial management companies.
2 See, American Fintech Council, “Federal: AFC Comment Letter on Interagency RFI to Address Payments Fraud,” (Sep. 18, 2025), available at https://www.fintechcouncil.org/advocacy/federal-afc-comment-letter-on-interagency-rfi-to-address-payments-fraud and American Fintech Council, "Federal: Advocacy Letter on Interagency Bank-Fintech Arrangements RFI," October 30, 2024, available  at  https://www.fintechcouncil.org/advocacy/federal-advocacy-letter-on-interagency-bank-fintech-arrangements-rfi.

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