Australian banks battle system gaps in compliance checks

Australian financial institutions report persistent pressures in compliance screening, with integration problems cited more often than any other challenge in a regional survey by LSEG Risk Intelligence.

The research found that 80% of Australian respondents ranked integration with existing systems as a major issue when screening customers across sanctions, politically exposed persons, and adverse media checks. Only Hong Kong recorded a higher figure at 82% among the Asia-Pacific markets included in the survey.

Australian firms also pointed to heavy operational strain. Manual remediation workload ranked as a top pain point for 78% of respondents. Inflexible screening tools followed closely at 76%.

Operational disruption

Delays tied to screening and remediation also featured prominently. The survey found that 36% of Australian firms experience onboarding or payment disruptions "at least often". That rate exceeded all other Asia-Pacific peers covered. Hong Kong and Japan followed at 32%.

The findings underline the risk that screening friction can spill into customer onboarding and transaction processing. Firms face regulatory expectations across sanctions compliance, controls for politically exposed persons, and monitoring for negative news. The survey results suggest many organisations still rely on manual steps when alerts require review and escalation.

Tool priorities

When asked what matters most in selecting screening tools, Australian decision-makers put real-time data access at the top. Some 70% cited it as a priority. Cost efficiency ranked next at 54%.

Ease of integration placed third at 46%. That result aligns with the survey's wider indication that many organisations struggle to connect screening systems with existing platforms and workflows.

Other selection factors reflected quality and workflow requirements. Precision and fewer false positives registered at 36%. Automation and customisation to risk appetite stood at 42%.

The survey also asked what would trigger a switch to a new screening provider. Real-time data access ranked as the leading reason for Australian firms at 29%.

Customisation followed at 18%. The need for improved precision came next at 12%, according to the research.

Regional picture

Across Asia-Pacific, the survey pointed to a broad pattern of inefficiency. Most institutions described real-time data access as important. A majority reported onboarding delays at least occasionally.

The research described a regional shift in demand towards tools that combine speed, automation, and up-to-date risk intelligence. It also reflected ongoing pressure on compliance teams as screening obligations extend across customer onboarding and payments, and as internal systems become more complex.

Industry spending on compliance technology has increased over the past decade as institutions respond to enforcement actions and supervisory scrutiny. At the same time, many banks and financial services groups operate with older core systems and multiple data sources. Those factors can complicate integration work and raise the effort required to tune screening settings and manage alert volumes.

Michael Meadon, APAC Lead for LSEG Risk Intelligence, linked the Australian results to operational and regulatory pressures.

"Australian institutions are clear about the pressures slowing them down: manual workloads, integration gaps, and increasingly complex regulatory expectations. Across APAC, firms are demanding real-time intelligence, better automation and configured workflows - and we're committed to helping them transform their compliance operations accordingly," said Michael Meadon, APAC Lead, LSEG Risk Intelligence.

LSEG Risk Intelligence markets screening products including World-Check, due diligence reports, and identity verification and onboarding services. The business sits within LSEG, which operates market infrastructure and provides data and analytics services.

The survey results suggest Australian institutions will continue to prioritise real-time data access and integration as they review screening platforms and processes, with providers competing on how well their tools fit into existing compliance workflows.