Most companies globally anticipate an increase in financial crime risks in the next 12 months, with cyber security and data breaches expected to be the primary drivers, followed by financial pressures on organizations, according to a recent report.

The 2023 Fraud and Financial Crime Report published by corporate intelligence group Kroll is the result of a survey of 400 executives across the globe conducted earlier this year, and shines a light on a global environment where more than US$800 billion is laundered every year.

To counter a potential uptick in financial crime risks, two-thirds (67%) of respondents globally are planning to invest more in technology, with nearly half of respondents (49%) citing data integrity as the biggest challenge when implementing new technologies.

Increasing pressure on compliance teams reinforce this need for adoption of technologies that can drive greater efficiencies in risk management, anti-money laundering, sanctions and anti-bribery and corruption programmes.

2023 has seen ongoing economic pressures, geopolitical tensions, an increasingly diverse regulatory environment and exciting advancements in artificial intelligence; and, the report notes, as the industry and the technology that empowers it develops rapidly, a better understanding of the state of the fight against financial crime has become more important than ever.

Key findings from global and Singapore-based respondents represented in this survey include:

• While 62% of Singapore respondents expect financial crime risks to increase over the next 12 months, 69% of global respondents expect the same.
• Nearly two-thirds of respondents, both globally and in Singapore plan to invest in technology to tackle the expected increase in financial crime.
• Several respondents – 60% in Singapore and 59% globally – believe governments are losing ground or will lose ground in the fight against financial crime due to rapidly evolving technologies.
• Digital currencies, evolving technologies, data privacy and sanction evasion tactics are rated as the top challenges posed to governments in fighting financial crime.
• While 52% of respondents in Singapore agree that third-party gatekeepers create anti-money laundering challenges, 58% of global respondents feel the same.
• 78% of respondents in Singapore and 73% respondents globally say they are dedicating more time towards enhancing supply-chain controls or diligence because of exposure to materials that originate from sanctioned counties or are subject to export controls in the next year.
• Nearly one-third of respondents, both in Singapore and globally say that their companies’ financial crime compliance programmes cater for risks associated with cryptocurrencies.
• 62% of respondents in Singapore and 61% of global respondents agree that environmental, social and governance factors should be a consideration for all businesses and part of every financial crime compliance programme.
• 66% of Singapore respondents and 60% of global respondents agree that greenwashing concerns or the perception of greenwashing have prompted them to make changes to their financial crime compliance programme.

“In the face of this dynamically evolving landscape, the convergence of technology, geopolitics and financial crime brings an intricate web of risks, but also opportunities,” says Reshmi Khurana, Kroll’s managing director, forensic investigations and intelligence, Singapore. “Harnessing technology advancements, strengthening governance and fostering transparency will be key to our collective success in this ongoing fight against financial crime.”