A growing number of financial services professionals in Australia expect financial crime risks to escalate over the next year, according to the latest Financial Crime Report by financial risk and advisory firm Kroll.
The survey indicated that 64% of senior executives in financial and professional services anticipate an increase in financial crime risks in 2025, although this figure is slightly lower than in other global markets.
The report identified cyber threats, artificial intelligence, regulatory developments, geopolitical tensions, and sanctions as key factors contributing to the evolving financial crime landscape.
While AI and cybersecurity advancements are being deployed to detect and prevent fraud, they are also being exploited by malicious actors, creating a complex challenge for risk management.
The survey found that 80% of respondents cited criminal use of AI as a growing concern, while 60% pointed to cybersecurity threats as a major risk factor. Other significant contributors include:
Despite the integration of AI into financial crime detection, only 24% of respondents believe it has significantly improved their compliance frameworks.
The findings align with separate research by cybersecurity firm Bitdefender, which reported a 126% year-over-year increase in ransomware incidents. In February 2025, there were 962 reported ransomware victims globally, up from 425 in the same period in 2024.
Cybercriminals have shifted their approach, increasingly targeting software vulnerabilities in internet-facing systems rather than focusing on specific industries.
Australia ranked sixth globally for ransomware attacks in February.
A separate study by cybersecurity firm Surfshark found that 47 million Australian accounts were compromised in data breaches in 2024, a twelvefold increase from the previous year. Since 2004, Australia has recorded 192.5 million breached accounts, the highest in the Oceania region.
Although a majority of executives expect financial crime risks to rise, confidence in existing compliance programs remains low, according to the Financial Crime Report.
Only 16% of respondents described their organisation’s compliance efforts as “very effective.” Challenges include:
Digital assets remain a growing concern, with 52% of respondents highlighting cryptocurrency-related financial crime as a moderate to significant risk. However, only 28% believe their organisation’s compliance programs sufficiently address these risks.
In response, 24% of firms indicated they plan to introduce new measures to counter financial crime linked to cryptocurrencies.
Assessing financial crime risks in the supply chain remains a challenge. The survey found that:
The survey also found that 56% of Australian respondents see cyber threats as a top geopolitical concern. The increasing use of AI in cyberattacks was highlighted as a factor driving risk exposure.
Commenting on the cybersecurity risks, Erich Kron (pictured), security awareness advocate at KnowBe4, said businesses should prioritise employee training to help identify and prevent threats such as phishing and social engineering.
“Cyber threats will continue to evolve, and attackers will always seek the easiest point of entry. Organisations that prioritise continuous cybersecurity education, alongside strong technical defences, will be in the best position to prevent, detect, and mitigate these threats before they cause harm. Cybersecurity is not just an IT issue; it’s a company-wide responsibility that starts with informed and vigilant employees,” he said.
Cem Ozturk, regional managing director, investigations, diligence, and compliance at Kroll, noted the growing complexity of financial crime risks.
“The changing nature of risk analysis means that businesses are expected to stay abreast of a variety of risk factors, but this becomes increasingly difficult, as illicit actors are adapting their tools,” he said. “While we are yet to see what this year will hold, risk professionals and compliance teams will need to be at the top of their game with the best support, technology, and knowledge available to ensure they can protect and grow their businesses.”
Gary Gill (pictured), head of investigations for Australia and New Zealand at Kroll, discussed the impact of AI on financial crime.
“In 2024, technology had a significant impact on financial crime in Australia with several key developments. Firstly, we saw financial institutions increasingly use AI and machine learning to enhance their transaction monitoring systems to improve their detection of financial crime activities and reduce false positives. In addition, we saw cybercrime continue to increase with AI-driven phishing attacks being used to deceive victims,” he said.
Amanda Wood, head of anti-money laundering advisory for Australia and New Zealand at Kroll, said firms may need to increase their investment in compliance measures.
“Increasing threats – combined with our report’s findings that there is generally a low level of confidence by firms in their existing financing crime programs – [are] a call to action to invest more in financial crime programs and capabilities. Firms that can best direct efforts to meet this changing landscape will be the ones that succeed, even as the outlook for financial crime grows more concerning by the year,” she said.
