In a world where technology continues to advance at an astonishing pace, the spectre of financial crime has taken on a new, multifaceted dimension, posing a serious threat to financial institutions globally.

FDM Group, an organisation dedicated to uniting people and technology, has stepped forward with five invaluable tips for businesses looking to harness the full potential of artificial intelligence (AI) in combating this evolving wave of financial crime.

According to the recently released Kroll’s 2023 Fraud and Financial Crime Report, a staggering 68 percent of respondents anticipate a surge in financial crime over the next 12 months. The report cites evolving technology as one of the major challenges in this fight.

Financial crime not only tarnishes a business’s reputation and erodes client trust but also results in direct financial losses, increased operational costs, and the looming threat of insolvency. Traditional methods of fraud detection and prevention are no longer adequate in the face of increasingly sophisticated criminals, which is precisely where artificial intelligence comes into play.

AI is now emerging as a powerful weapon transforming the finance industry’s response to financial crime and allowing it to keep pace with the evolving tactics of criminals. Sonia Jain, Consultant Operations Manager at FDM Group, emphasises, “Financial crime encompasses illegal activities aimed at financial gain. Its consequences can have a profound impact on society and the global economy. With the assistance of AI, we can not only combat financial crime but also proactively monitor financial activities in real time to prevent its occurrence.”

Here are five key ways businesses can employ AI to combat financial crime effectively:

  1. Real-time monitoring

AI-powered systems are at the forefront of the battle against financial crime, offering real-time monitoring of financial transactions. This capability is instrumental in swiftly identifying and addressing potential threats. Suspicious activities, such as unusual transaction patterns, can be automatically flagged by AI algorithms, triggering immediate investigations.

By detecting and responding to illicit activities promptly, financial institutions can mitigate risks before they escalate and prevent crimes from occurring in the first place. The real-time nature of AI-based monitoring not only enhances security but also serves as a deterrent to potential criminals, as they are more likely to be caught in the act, thereby reducing the overall occurrence of financial crime.

  1. Data analysis and pattern recognition

AI’s remarkable ability to analyse massive datasets at lightning speed is a game-changer for financial institutions. Given the vast amount of data they handle daily, it is challenging to identify suspicious activities manually. AI algorithms excel at identifying patterns and anomalies within these data, helping to flag potentially fraudulent transactions or activities that might otherwise go unnoticed.

  1. Natural Language Processing (NLP)

Financial criminals frequently communicate through digital channels, leaving behind a wealth of text-based data that can serve as a treasure trove of evidence. Natural Language Processing (NLP) algorithms are instrumental in sifting through this textual data, scanning emails, chat logs, and other messages to identify suspicious or incriminating conversations.

These algorithms can detect keywords, phrases, or patterns associated with financial crimes, helping investigators uncover hidden connections, illegal activities, and nefarious intentions. NLP’s ability to parse and understand human language allows financial institutions and law enforcement agencies to stay ahead of criminals who attempt to mask their activities in written communication.

  1. Machine learning for predictive analysis

AI’s capacity to learn from historical financial crime data is a strategic advantage in the fight against illicit activities. By training on past cases, AI can construct predictive models that identify emerging threats and evolving criminal tactics. These models continually evolve and adapt, staying one step ahead of wrongdoers who seek to exploit vulnerabilities in financial systems.

  1. Behavioural analysis

AI’s ability to construct detailed user profiles from transaction history and behaviour is a game-changer in financial crime detection. By establishing baseline behaviour for each customer, AI can promptly identify deviations from these norms. For instance, if a user typically conducts small, domestic transactions but suddenly initiates large withdrawals or transfers to high-risk countries, the system will trigger alerts for immediate scrutiny.

This proactive approach enables financial institutions to swiftly respond to potential threats and investigate suspicious activities, enhancing their capacity to prevent money laundering, fraud, and other illicit financial behaviours while safeguarding the integrity of their operations and the interests of their customers.

In a world where financial crime looms larger than ever, the adoption of AI-driven solutions is not just an option but a necessity for businesses aiming to protect their assets and maintain trust in an evolving landscape of threats.






Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.