The 2025 Anti-Financial Crimes Risk Landscape

The year is off to a dynamic start for financial crimes professionals navigating a complex web of competing priorities in an increasingly politicized environment. This article outlines key developments shaping the 2025 anti-financial crimes landscape for financial institutions and Fintechs—covering emerging threats in money laundering, fraud, and sanctions—and concludes with practical strategies for staying ahead.

Internal Trends

All Eyes On Technology: One theme for 2025 could be “out with the old and in with the new.”  Anti-Financial Crimes technology can include systems for money laundering alerts, fraud alerts, identity management, case management, negative news, CDD/KYC applications, sanctions screening, and a host of other add-on utilities that help an Anti-Financial Crimes program because more effective and efficient. Those enhancing AML risk management programs will find that it’s a combination of CDD/KYC and monitoring tools that impact the program the most. Those building out a fraud risk management program will find that identity-focused tools tend to stop fraud before it occurs or as it’s occurring (assuming data is real-time), and monitoring systems tend to alert users to fraud that may have already occurred, so an investigation can take place. Those involved with sanctions screening will find that improvements in screening algorithms will be prevalent in 2025.

We perceive the use of artificial intelligence by financial institutions to be a subset of technology. Any and all of the systems above can be enhanced by the use of AI, so rather than see AI as a new and different category, we see it as an enabler of the various technology systems above. There will be brand new AI-based systems for money laundering, fraud, and sanctions screening, and there will be existing offerings in those areas that have newly added AI features. One thing they all have in common, however, is that all of them could give rise to bias risk and model risk – bias risk from an individual or entity receiving unwarranted treatment in terms of alerts due to some non-financial crime bias in the AI, and model risk from users not being able to explain how the model is behaving.

Rogue AI Privacy/Security Risk: Every head of an Anti-Financial Crimes department should be concerned that someone in the department is going rogue with some open AI tool and uploading extremely confidential information to it in order to do their job better or quicker. The risk is even greater when the information is SAR-related. Not only could GLBA rules be violated, but that extra layer of confidentiality invoked by BSA rules could be violated as well. If Anti-Financial Crimes department heads haven’t provided formal training and informal reminders to staff that this is prohibited, they should do so as soon as possible. The need for this has recently expanded with the new open AI tool from a country that is not perceived as being friendly toward the U.S.

External Trends

Expanding Payments Landscape: The payments space has become inextricably intertwined with the Anti-Financial Crimes space over the past few years… to the point where payments certifications are becoming almost as valuable as Anti-Financial Crimes certifications for professionals investigating alerts, managing fraud, and performing sanctions screening. The expansion of the payments space is expected to continue in 2025, and this includes the speed at which payments take place, the increasingly international aspect of payments, and wider adoption of new payments products, such as cryptocurrency. It doesn’t matter if an Anti-Financial Crimes professional works in a big bank, small bank, credit union, or Fintech, having a thorough understanding of the payments space is a necessity for preventing and detecting financial crime.

The Use Of AI In Scams: Scams using simple social engineering tactics are successful enough as they are. But add AI into the mix, and the number of, and sophistication of, scams against customers by outsiders will skyrocket. For example, consider a simple grandparent scam. Many grandparents will send funds, but a few will be skeptical. Add in a deep fake voice recording or video of the grandchild, and now the skeptical ones could be swayed. The same will hold true for Business Email Compromise schemes where the victim believes they are contacting and verifying the requested transaction with the real requestor/approver, when in fact the victim is having a conversation or video meeting with a deep fake. Overall, scams will have a higher success rate.

Cybersecurity/AML Convergence & Cyber SARs: Cyber events directed against financial institutions, such as ransomware attacks, will continue to increase in 2025. Even unsuccessful cyber events could require a SAR. Many institutions have not yet formalized communication between InfoSec/Cyber departments and AML departments. Other institutions have formal Fusion Teams for such a purpose. The goal in 2025 should be to somehow formalize the communication between InfoSec/Cyber departments and AML departments such that cyber-SAR reporting can be supported.

Increased Fraud Losses: The key drivers to an increase in fraud losses in 2025 will be 1) increased fraud attempts (shots on goal); 2) increased sophistication of those attempts; and 3) increased successes for the fraudsters. The three together will lead to increased losses. Some of the increase in fraud losses will be mitigated by an increase in the use and sophistication of technology to thwart the fraudsters, discussed above, but overall fraud losses will continue to increase in 2025.

Sanctions In Flux: In the first few weeks of the new presidential administration, two executive orders have impacted, or will impact, the number of designed Foreign Terrorist Organizations. One such order created a process by which certain international cartels and other crime groups could be designated as Foreign Terrorist Organizations. Another order re-designated Ansar Allah (also known as the Houthis) as a Foreign Terrorist Organization. The new administration also removed sanctions on certain Israeli settlers and groups in the occupied West Bank – sanctions initially put in place in February 2024. All of these moves came within a 3-week period, and more moves should be expected in 2025.

Noise From Tariffs and Shadow Markets: One thing financial crimes professionals are aware of, is the proliferation of shadow markets in response to some nudge from something the bad actors wish to avoid such as tariffs. While tariff avoidance is not a criminal activity, financial crimes professionals can expect some ‘noise’ in international trade markets that could add complexity to investigations of international transactions and even mimic sanctions evasion techniques. As mentioned above, monitoring transactions for sanctions avoidance activity is difficult enough without having to sift through complex transactions done solely to evade tariffs.

Other Trends In 2025

Competition For Fraud Risk Management Leaders: Financial institutions have always experienced fraud. Ten years ago, most financial institution leaders were still part of the “fraud is a necessary cost of doing business” camp and felt that fraud should be allowed to continue because anti-fraud measures added friction to transactions. Because of that, the talent pool of leaders who have experience with fraud risk management might not be large enough to meet the need in 2025, leading to competition among fraud risk management professionals.

An End To Derisking?  This one has a question mark for a reason, as we aren’t certain that any level of purposeful derisking was occurring to begin with. But if there was derisking occurring, financial institutions will need to rethink their policies and procedures to ensure that the risk factors aren’t based on a purely political stance, and they’ll need to document and defend their practices.

One thing that’s notable about the above list is that it doesn’t resemble the crystal ball lists from prior years. Between the expanding use of technology and AI, the external forces impacting financial crimes, and the actions of the new administration, things simply feel different. The best course of action is to stay informed, have conversations with other Anti-Financial Crimes professionals, and continually adjust risk management programs for AML, fraud, and sanctions screening. Stay nimble to meet the demands of 2025.