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AML / KYC
02:02 AM 22nd April 2025 GMT+00:00
Coordinated and Agile Response Needed to Address Financial Crime Threats in APAC
Regulation Asia Co-founder Bradley Maclean discusses newly published research and what the findings say about the ongoing fight against financial crime.
Reporting by Bradley Maclean

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Article Summary
The ongoing battle against financial crime in the Asia Pacific region is intensifying, driven by rapid technological advancements that outpace regulatory measures, creating vulnerabilities for financial institutions to exploit.
The AML Tech Barometer 2025 report reveals that over 90% of financial institutions are now utilising artificial intelligence and machine learning for critical compliance functions, marking a significant shift towards automated systems for enhanced detection and efficiency.
The report stresses the need for a coordinated approach to integrate designated non-financial businesses and professions and non-bank financial institutions into the anti-money laundering ecosystem, alongside harmonising regulations to strengthen collective efforts against transnational financial crime.
This summary has been produced by RegAI.
While financial systems serve as the lifeblood of global trade and investment in the Asia Pacific region, recent months have underscored that the escalating battle against financial crime is a high-stakes contest between innovation and exploitation.
The phrase “may you live in interesting times” aptly captures the current landscape, where chaos prevails as technological advancements outpace regulatory measures, creating a perfect storm for bad actors.
The growing complexity and speed of financial transactions, coupled with the anonymity provided by digital platforms and increasing geopolitical uncertainties, emboldens organised crime networks and sophisticated fraudsters.
As these opportunistic criminals exploit vulnerabilities in AML compliance systems and controls, the threat of financial crime intensifies, presenting formidable challenges for financial institutions (FIs) striving to protect their clients and uphold financial system integrity.
The stakes have never been higher, demanding a coordinated and agile response to protect the financial ecosystem.
The AML Tech Barometer 2025, now in its fifth year, provides insights into how technology is transforming financial crime risk management among Asia Pacific FIs. This year’s report highlights the significant impact of advanced technologies, particularly artificial intelligence (AI) and machine learning (ML), in the fight against sophisticated criminal networks.
Transformation Through Technology
The report highlights a remarkable surge in the adoption of AI and ML technologies, with over 90% of financial institutions now testing or utilising these tools for critical functions such as transaction monitoring, sanctions screening, and customer onboarding.
This widespread integration signifies a paradigm shift from traditional manual processes to automated systems that enhance detection accuracy and operational efficiency. As one compliance officer noted, “AI has transitioned from an experimental tool to an operational necessity.”
Emerging Threats
Despite the rapid technological advancements, financial crime continues to evolve, presenting new and pressing challenges. The report identifies several key threats:
Trade-Based Money Laundering (TBML) and Sanctions Evasion Risk: Criminal organisations exploit the complexities of international trade to obscure illicit financial flows. With 56.3% of FIs citing TBML as a key compliance priority, robust detection methods are paramount, especially in high-volume trade hubs like Hong Kong and Singapore.
Synthetic Impersonation and AI-Driven Fraud: The rise of deepfake technology has made it easier for criminals to create convincing fake identities, complicating traditional onboarding and transaction processes. The report notes a troubling increase in AI-driven phishing schemes, highlighting the need for advanced identity verification tools to safeguard financial systems.
Organised Crime and Human Trafficking Networks: These networks increasingly utilise legal business structures, such as shell companies, to facilitate their criminal operations. The convergence of financial crime and human trafficking underscores the multifaceted nature of modern organised crime, necessitating coordinated responses from both FIs and regulators.
The Role of DNFBPs and NBFIs
The report emphasises the importance of integrating designated non-financial businesses and professions (DNFBPs) and non-bank financial institutions (NBFIs) into the broader AML ecosystem.
Often under-resourced and facing unique compliance challenges, these entities are frequently exploited by organised crime networks. Developing tailored compliance frameworks and enhancing oversight are essential to empowering DNFBPs to play a more proactive role in combating financial crime.
Regulatory Challenges and Opportunities
The regulatory landscape is also evolving, with increasing emphasis on harmonising AML regulations across jurisdictions. Fragmented frameworks can hinder information sharing and weaken collective efforts to combat transnational financial crime.
The report advocates for collaborative platforms, such as Singapore’s COSMIC and Hong Kong’s FINEST, which facilitate the sharing of information Facilitating the sharing of information related to financial crimes and strengthen their ability to combat financial crime.
Key Recommendations
To build a more resilient AML ecosystem, the report outlines several actionable recommendations for FIs, DNFBPs, and regulators:
Accelerating Technology Adoption: FIs must fully embrace AI and ML tools, not just for operational efficiency but also to address complex financial crime typologies, such as proliferation finance and wildlife trafficking. Seamless integration with legacy systems is crucial to maximise these technology investments.
Empowering DNFBPs: Targeted training programmes and scalable AI solutions can equip DNFBPs to become credible players in the AML landscape. Enhanced collaboration with FIs will help close loopholes frequently exploited by organised crime networks.
Harmonising Regulatory Frameworks: Broader efforts are necessary to align regulatory standards across jurisdictions, facilitating information sharing and cooperation in dismantling transnational crime networks.
Conclusion
While the research does not address the potential impacts of recent geopolitical turmoil on intelligence-gathering processes, it underscores the urgent need for collective action in the fight against financial crime.
By leveraging technology and fostering collaboration, FIs, DNFBPs, and regulators can build a more resilient financial ecosystem. Success in this ongoing battle requires not only the adoption of advanced tools and data sources but also the establishment of a unified, adaptable framework for information sharing to counter the ever-evolving threats posed by financial crime.
The findings highlight that integrating advanced technologies alone is not enough and that without a more coordinated and cross-border approach, effectively addressing these challenges will remain elusive.
In the absence of such collective efforts, the integrity of the financial system—and the trust of its stakeholders—will continue to be at risk, leaving it vulnerable to these increasingly pervasive, persistent and sophisticated threats.
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Download the full AML Tech Barometer 2025 report. This year’s report features interviews with Rebecca Miller, Regional Coordinator for Human Trafficking and Migrant Smuggling at the UNODC Regional Office for Southeast Asia and the Pacific, and Beju Shah, Head of Nordics at the BIS Innovation Hub.
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