INSIGHT: Five themes defining Europe’s fight against financial crime in 2025

From regulatory harmonization to a changing payments ecosystem and the role of AI, the anti-financial crime (AFC) landscape in Europe is undergoing a significant transformation. Here are five key themes shaping the future of anti-money laundering (AML) and financial crime prevention across the continent.

1. AMLA: the road to harmonized oversight

The new EU Anti-Money Laundering Authority (AMLA) is taking the first steps to becoming a fully functioning regulator. Formally enacted in April 2024 following the EU’s announcement of its landmark package of AML reforms, the AMLA is currently focusing on solidifying operational building blocks to carry out its duties.

Before assuming direct supervision at the start of 2028, the new regulator will also be working on developing a harmonized supervisory methodology and establishing its rule-making capabilities.

For now, the European Banking Authority (EBA) is supporting the AMLA by drafting new technical standards that will underpin a single EU AML rulebook. However, a regulator is only as good as the principles it’s built upon and the external expertise of industry practitioners. For example, the influential Wolfsberg Group is playing a key role by advising the EBA on the new standards. With time, responsibility for producing new technical standards will shift to the AMLA.

2. The Single EU AML Rulebook: harmonization challenges

The Single EU AML Rulebook, coming into effect in July 2027, will replace the current anti-money laundering and combating the financing terrorists (CFT) directives in the EU. Introducing a single set of rules that all member states must follow, the single rulebook aims to close loopholes and inconsistencies in how different countries have applied the current directives.

However, achieving true harmonization across the region is not an easy path, and must move beyond policy to ensure member states are aligned to execute effectively. There are gaps in capability, confidence, and clarity of approach between countries that are slowing progress. Bulgaria and Croatia, which are grey-listed by the Financial Action Task Force (FATF), are two cases in point. As such, there are calls for clearer mandates, enhanced capacity building, and support to help national authorities meet shared goals.

3. Article 75: establishing new parameters for information sharing

Information sharing plays a crucial role in combating money laundering and counter terrorist financing. However, limitations in the current information exchange frameworks are slowing down the transfer of intelligence, reducing the efficacy of data analysis. Article 75 of the EU’s AML Regulation seeks to address this challenge.

Currently, information is shared via Suspicious Activity/Transaction Reporting (SAR/STR) frameworks, which are coordinated by national Financial Intelligence Units (FIUs), and in some jurisdictions, through public-private partnerships (PPPs) such as the Fintell Alliance in the Netherlands.

Although both approaches provide valuable information, they operate independently of each other. It can also be challenging to obtain information across borders, necessitating a central body to coordinate the exchange of information. Article 75 is poised to alter the status quo by facilitating cross-border collaboration and direct information-sharing agreements among banks.

4. Payments: changing screening mindsets

Traditionally, regulated institutions have cast a wide net to capture every payment when screening transactions, but with transaction volumes increasing, a myriad of new payment rails emerging, and sanctions lists expanding, this legacy approach no longer works.

Today, institutions must be ready to handle the complexities of both traditional batch payment and new real-time systems, such as SEPA Instant Credit Transfer. In the case of real-time payments, this means ensuring all compliance checks are completed within the requisite timeframes without negatively impacting the customer experience.

Against this backdrop, adopting a risk-based approach to payment screening, as opposed to boiling the ocean with a one-size-fits-all policy, is crucial. The latter method can lead to organizations drowning in false positives. In contrast, a more judicious approach is to use advanced systems to apply tailored rules to different payment types, based on customer profile, jurisdictional risk, or the payment corridors involved. Additionally, capabilities such as straight-through processing (STP) for trusted counterparties, based on previous remediations, can enhance both alert quality and the customer experience.

5. AI in AML: promises and pitfalls

Artificial intelligence (AI) is already transforming certain AML practices, but in other areas, further progress is needed. It is increasingly effective in transaction monitoring, where it helps regulated institutions check transactions in real-time and reduces the number of false positives. It’s also proving its worth in customer onboarding, by helping to reduce errors and manual reviews. On the other hand, its impact to date has been limited in name screening due to complex linguistic and contextual challenges.

There are also operational trade-offs to consider. Although AI might reduce manual workloads in some areas, it could increase costs in others. The ongoing tuning of models, prompt engineering, specialized oversight, and staff training can drive up costs, making it essential to conduct detailed cost-benefit analyses to understand potential savings. Compliance practitioners are also calling for international standards to support the safe and consistent use of AI, given the increasing prevalence and application of generative technology (GenAI), as well as recurring issues around data privacy and copyright infringement in model training data. 

GenAI also presents new challenges for AML compliance, for instance, by facilitating the creation of synthetic documents, which means firms must revisit their identity verification processes.

A new era calls for a risk-based approach

As Europe enters a new era of financial crime prevention, a common thread running through each of these themes is the need for a risk-based approach. Regulatory harmonization, AI integration, and payment screening will all fall short if institutions rely on blunt, one-size-fits-all compliance models.

To effectively navigate growing complexity, firms must tailor their strategies to direct resources to the highest risks where they’ll have the greatest impact. In a landscape defined by rapid change and rising expectations, risk-based compliance is no longer just a best practice—it’s essential to survival.