Financial crime risks are expected to increase in 2025, according to a report by Kroll.
The findings indicate that cybersecurity, artificial intelligence (AI), regulatory complexities, and geopolitical uncertainty are among the primary concerns for financial and professional services firms.
Cybersecurity remains a dominant concern, with 68% of professionals anticipating increased financial crime risks. To address these threats, 49% of organizations plan to invest in AI-based solutions.
However, confidence in AI’s role in financial crime compliance has declined. Only 20% of respondents say AI has had a “very positive” impact on their compliance framework, compared to 37% in 2023.
Despite this, 27% of organizations have adopted AI and machine learning as part of their financial crime compliance programs, an increase from 24% the previous year. These technologies are primarily used to detect suspicious behavior (63%), analyze networks (54%), and identify risk signals (44%).
Regulatory enforcement is expected to intensify, with 55% of respondents predicting an increase in financial crime enforcement actions in 2025.
Additionally, 59% anticipate changes in corporate transparency regulations within the year.
Sanctions compliance remains a pressing issue, with 49% of professionals identifying evolving regulations as their biggest challenge, up from 34% in 2023.
Confidence in sanctions screening varies, as 39% of respondents report being “very confident” in their organization’s capabilities.
Approaches to sanctions screening differ among firms. While 37% conduct screening internally, 34% use third-party services, and 28% implement a hybrid model.
Geopolitical instability continues to shape financial crime risk assessments. Only 33% of respondents say they feel “very prepared” to handle geopolitical risks in the coming year, and 38% express strong confidence in their compliance programs' ability to detect emerging threats.
Among those less confident in their programs, 56% cite cybercrime as their primary concern for 2025, followed by political instability (35%) and geopolitical risk (26%).
The insurance sector appears particularly exposed, with 58% of professionals concerned about potential new economic and financial sanctions.
David Lewis, managing director at Kroll, said that financial institutions must keep pace with evolving threats, as illicit actors continuously adapt. Brent Tomlinson, co-president of risk advisory at Kroll, adds that professionals in the sector face increasing uncertainty, requiring strategic decision-making.
How should financial institutions prepare for the evolving risks of financial crime? Share your insights in the comments.
