The Evolution of Financial Crime and the Need for a Change in Approach
Visualization created with AI assistance based on original reporting.
Escalating Financial Crime: A Growing Threat for Banks
Financial crime is evolving rapidly, surpassing the ability of financiers to combat it efficiently. The issue is not a lack of concern, but rather that the infrastructure in place is outdated, designed for a different era. The fight against financial crime is now an exposed, high-priority function that banks are struggling to keep up with. The risk is now a board-level issue, a geopolitical variable, and a reputational threat.
The Current State of Financial Crime Compliance Education
Unlike other financial disciplines, financial crime compliance lacks a standardized entry pipeline. There’s no consistent early-career recruitment system or an established academic pathway. Only a small number of universities offer programs that align with the realities of the field. As a result, most professionals enter the field mid-career, often coming from audit or law enforcement backgrounds, or they are appointed to lead teams with little prior domain exposure. The problem is that the nature of financial crime is no longer restricted to anti-money laundering (AML) or customer knowledge. Fraud, laundering, sanctions evasion, geopolitics and national security are now all interconnected risks that compliance teams must navigate.
Adapting to the Fast-Paced Evolution of Financial Crime
Financial crime is a dynamic threat. Criminals constantly adapt their tactics, and institutions must keep pace. The issue is that the threat evolves faster than institutional learning cycles. In many cases, training modules are only refreshed annually, leaving a gap in knowledge and leaving institutions vulnerable. Over the past year, this gap has deepened due to shifts in enforcement posture, relaxed priorities, and new complications arising from geopolitical circumstances, such as maritime evasion, narcotics flows, and trade finance risks.
Addressing The Crisis: A Call for Internal Solutions
This lack of preparedness is not confined to the U.S. Global exposure is increasing, and there’s a lack of trained professionals to manage it. Compliance teams are overextended, and interdisciplinary learning between sanctions, fraud, and AML is rare. It has become evident that a solution must be found within institutions. Compliance training needs to be funded, prioritized, and maintained, focusing on continuity rather than compliance cycles.
Changing the Landscape of Compliance Training
Baseline expectations for compliance training must change. Fraud, sanctions, and laundering need to be taught together as they intersect in practice. Governance functions should approach training as a dynamic, continuously evolving discipline, one that is informed by real-time threat intelligence and responds to shifting risk patterns in near-term cycles. Senior executives should be embedded in this process, and boards must understand how financial crime exposure changes quarter to quarter, as it is moving at that speed now.
Final Thoughts: The Urgency of the Situation
What makes this urgent is not just the scope of the threat, but the mismatch in pace. Institutions are static in an environment defined by movement, leading to a weak position. Every fraud breach, sanctions violation, or laundering scandal reveals a preventable failure. It’s not the controls that fail, but the understanding of risk. The answer isn’t more headcount. It’s a sharper focus on the infrastructure of learning. The risk isn’t being wrong. It’s being too slow to see the change. And right now, that’s exactly where too many institutions are sitting.
Source: Here
