Irish firms struggling to comply with anti-money laundering regulations

The new EU requirements come into force next year

Most Irish financial institutions say they will not be compliant with new EU anti-money laundering requirements when they come into force next year. Picture: PA

Most Irish financial institutions say they will not be compliant with new EU anti-money laundering requirements when they come into force next year.

Just 43% of Irish financial institutions expect to be fully compliant with the new requirements, according to research by PwC, with substantial compliance gaps, rising costs, and operational strain.

The new EU Anti-Money Laundering (AML) Package comes into force in July 2027, putting increased compliance obligations on firms. The APL package includes maintaining client records and report suspicious transactions, monitoring transactions, carrying out customer due diligence (CDD) to verify the identity of clients; and risk assessments.

The new EU AML Package has a deadline of July 10, 2027. According to PwC, even the most sophisticated financial institutions are finding challenging to comply with the new operational and supervisory framework. Just 31% of Irish firms surveyed reported said they had completed both a detailed regulatory analysis and an impact assessment of the new AML requirements.

“Irish financial institutions need to do more to prepare for new anti-money laundering rules. The survey findings suggest that Irish firms, despite operating at the centre of EU financial activity, may face heightened risk of non-compliance unless they accelerate implementation efforts in the coming 12 months," said PwC Ireland anti-money laundering director Muireann O’Keeffe.

Firms face shortage of qualified staff

According to the survey, 37% of Irish firms said they had a shortage of qualified staff to meet the new AML requirements. Most (58%) Irish respondents said that they plan to increase AML resources with 82% of those planning a 20%-30% headcount uplift. Nearly three-quarters (72%) of Irish respondents said that they have already launched initiatives to review transaction monitoring and screening capabilities.

Customer due diligence was described as the most pressing operational challenge in Ireland with 80% of Irish respondents only partially aligned with the draft regulatory requirements. Irish respondents expressed concerns about a shift towards a rules-based over risk-based approach, as well as excessive data collection.

PwC says efforts to prevent money laundering are becoming more challenging due to ever more sophisticated, digitally-driven and cross-border threats.

"The dual pressure — rising costs alongside growing workforce demands — highlights the structural shift underway in AML compliance, as firms transition from reactive compliance models to more industrialised, scalable approaches," said Ms O'Keeffe. "Financial institutions are caught in a cycle where rising regulatory expectations require more resources, yet the availability of appropriately qualified staff remains limited.” 

The survey was carried out amongst 531 financial institutions across 40 countries in the Europe, Middle East, and Africa region. In Ireland, respondents included retail sector firms; corporate, and private banks; insurers, asset managers, payment institutions, asset servicing providers, and virtual asset service providers.