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The unprecedented ability of crime syndicates to harness new technologies for fraudulent purposes and the widespread evasion of Western financial and trade embargos top the list of threats keeping compliance officers up at night, new research by ACAMS shows.

In a 66-page report that draws on the views and experiences of almost 1,600 financial services executives and compliance officers across more than 200 jurisdictions, ACAMS concluded Thursday that traditional financial crime-related concerns, such as underground banking and the criminal abuse of legal entities, will remain relevant and “largely unmitigated” in 2025.

“However, traditional concerns have been compounded by era-defining changes in technology that are reshaping how criminals and rogue actors operate,” ACAMS noted in the annual report. “As a result, the fusion of fraud, technology and organized crime is emerging as the most severe global threat.”

“Authorized” fraud, whereby criminals trick their victims into sending money to accounts they control, has emerged as the top illicit finance-related threat for institutions across the globe, not least because social media platforms and messaging apps allow scammers to operate “on an industrial scale,” ACAMS found.

The growing use of generative artificial intelligence, or AI, for malicious purposes, including to assume other identities during investment and romance fraud schemes and subsequently con victims into draining their accounts, compounds the challenge.

“The sheer speed, scale and sophistication of criminal exploitation—notably with malware, social engineering and video/voice cloning, sometimes referred to as ‘deepfakes’—make this one of the most significant threats to financial crime functions,” ACAMS reported Thursday.

Respondents to the global survey noted that because the victim initiates the payment, authorized fraud can be difficult to detect. A lack of “advanced analytics tools” at the financial services industry’s disposal exacerbates the problem, as does insufficient cooperation between anti-fraud, anti-money laundering and other anti-financial crime personnel.

Respondents identified the increasingly sophisticated evasion of financial sanctions and export controls as their second greatest challenge, though, notably, respondents in Europe and the Middle East ranked them as their top threat.

That evaders often use methods more commonly associated with money laundering requires banks and other institutions to build more coordination between their sanctions, export control and anti-money laundering functions, train staff on spotting such techniques, and recruit new and sufficiently skilled personnel to investigate breaches.

Sanctions evasion often relies on underground banking networks that in turn use bulk cash smuggling and cryptocurrency transfers to bypass the traditional financial system, making them exceedingly difficult to detect, ACAMS noted Thursday.

Financial services executives who responded to the survey opined that the intensification of geopolitical conflict and politically motivated violence across the globe last year is “fueling a more polarized and complex operating environment” for compliance departments.

Banks must already contend with a “dizzying pace of regulatory change across virtually all aspects of their programs,” only now they must do so against the backdrop of increasingly “disparate regulatory priorities” between countries no longer closely aligned in their objectives.

“Change on this scale is anticipated to have an acute impact on resources, people and technology,” ACAMS warned Thursday. “The insufficient ability to operationalize regulatory change or new priorities is seen as a serious threat.”

As for “internal risks,” respondents highlighted that staff retention still poses a “significant challenge” and warned that their employers’ failure to update legacy IT systems has left them unable to leverage all the data available to them for compliance purposes.

The survey also identified a “lack of consensus or consistency” in the adoption of AI globally, as fewer than half of all respondents noted that they were piloting the technology or already using it as a “primary or secondary” tool in their compliance programs. Respondents in Asia ranked as the most frequent adopters of AI last year, according to the survey, while U.S. respondents showed the lowest levels of adoption.

ACAMS also found that “banking-as-a-service” and other innovative arrangements between banks and fintechs have emerged as a top concern for compliance officers, largely because the complexity of such relationships hampers efforts to determine which of the parties in them must vet clients for anti-money laundering purposes and fulfill other regulatory obligations.

Finally, respondents to the survey noted that failures by their national governments to “clearly define priorities and desired outcomes” for their respective policies against illicit finance has left financial institutions no choice but to “make their own, often inconsistent or conflicting, interpretations of priorities, and what constitutes success.”

“The failure to define desired outcomes was identified by professionals around the world as one of the key reasons why AFC [anti-financial crime] regimes are not as effective as they could be, negatively impacting all the threats identified here and beyond,” ACAMS concluded.