The Enforcement Directorate registered 5,063 money laundering cases between January 2020 and July 2025 and, during this period, courts ordered confiscation of assets worth ₹15,558.21 crore (~$1.7b) under the anti – Money Laundering Act provisions. If that wasn’t bad enough, banking fraud losses surged to ₹36,014 crore (~$4b) in FY 2024-25, representing a 194% increase from the previous year. Public sector banks accounted for approximately 2/3 of this pie.
While the above figures are for India, the financial crime and money laundering challenge is a global one. Money laundering drains five percent of global GDP annually, equivalent to $5.5 trillion USD, according to GlobalData, a well-known research firm. India loses 5.2% of its GDP, north of $200b. The firm’s report also postulates that this number could be halved with effective application of AI in the finance ecosystem. However, the path to these gains requires financial institutions to overcome significant hurdles in trust, transparency and governance.
Incidents of money laundering, fraud and other types of financial crimes are a recurring issue for banks because they are always a step behind the perpetrators in ingenuity, resources and investments. To effectively combat financial crime, first, the compliance function must transform from a cost centre to strategic capability, with firms recognizing the critical role the function plays in preserving reputation, preventing fraud related losses and keeping bad actors out of the corporate ecosystem.
Second, with its ability to spot patterns, suspicious transactions and identify fake documents, AI technology is a key weapon in the fight. For example, AI powered platforms are much more effective in capturing and curating negative news about a target, mitigating the chronic problem of “false positives” and providing easily digestible output. However, AI must pass the “trust test” through removal of hallucinations, full explainability, complete traceability and auditability and, finally, human oversight—the ability of domain experts to examine transactions and rectify any errors.
Third, the upheavals in global trade, the massive rise in sanctioned entities and the rise of phenomena such as “Putin’s ghost fleet” of unregistered oil tankers have created conditions that are ripe for an upsurge in cross border financial crime. Transaction screening and monitoring systems as well as associated real-time analytics that leverage cutting edge technology and high-quality datasets are an absolute must to stay ahead.
Fourth, there needs to be a step up in fraud training in financial institutions. While anti money laundering training is an area of focus and investment, the broader fraud category will benefit from more trained and informed professionals. Gamified, AI powered training platforms with world class content are now available and make training adoption easier, and with higher efficacy.
Finally, deregulation presents a double-edged sword. While the United States rolls back several regulations under the current dispensation, other jurisdictions like Australia and the European Union pursue prescriptive frameworks. Perhaps the time has come to shift the lens to what is most effective rather than simply “more” or “less” regulations. Also, AI now allows for probabilistic frameworks to be put in place that will give the regulators confidence of maximum possible coverage of the ecosystem by the compliance platforms.
Financial criminals are winning around the world. Money laundering and fraud are endemic challenges that we must work together to overcome. A mix of new age technology, sensible investments in data and process, and an army of well-trained compliance professionals is the way forward in a battle that we cannot afford to lose.