The effectiveness of AML/CFT measures can be best measured by the extent to which systems...

While regulatory compliance, cost efficiency, and operational considerations are important, the primary objective of AML/CFT measures is to reduce and manage the risks and threats of financial crime. FATF emphasizes that effectiveness should be measured by outcomes, not merely by technical compliance.

An AML/CFT framework may fully comply with laws and still be ineffective if it fails to detect, deter, or disrupt money laundering and terrorist financing. Regulators increasingly focus on whether systems and controls actually identify suspicious activity, prevent misuse of the financial system, and support law enforcement efforts.

Minimizing operational burden and controlling costs are secondary considerations and must not compromise risk mitigation. A cost-effective system that fails to detect financial crime would not meet regulatory expectations.

Therefore, the true measure of effectiveness lies in how well systems and controls mitigate financial crime risks and threats in practice.