Forrester warns “new hotspots have emerged for money launderers”

Forrester has warned money laundering hotspots are on the rise as its latest findings show how crime is mounting and the tools used to combat its upsurge.

In its Top Trends Shaping Anti-Money Laundering in Asia Pacific in 2024 report, the global market research company identified top anti-money laundering (AML) trends in APAC and patterns.

Meng Liu, senior analyst at Forrester and lead author of the report said, "New hotspots have emerged for money launderers, while innovative technology has also emerged to fight against them.

“Notably, generative AI has catapulted itself into the forefront of this fight." 

Key trends across the APAC space include shell companies have become a mine field for money laundering as multiple regulations across countries lead to easy loopholes open for exploitation.

There was also a rise in investor interest and the growing crypto market and regulatory gaps cause a surge in crypto-based money laundering, according to the report

Findings also showed rising interest from investors in the crypto space was indirectly leading to a surge in money laundering.

Banks across the Asia-Pacific region are now also struggling with the rise of AML activity as multiple systems of legit trading gives criminals ample opportunities to manipulate invoices, overvalue goods, and transfer illicit funds under the guise of legitimate trade. 

“Financial institutions can’t successfully battle increasingly sophisticated money laundering risks on their own,” said Liu.

“Forrester sees that there has been an increase in public and private collaboration on data sharing, with one key example being the Monetary Authority of Singapore’s collaboration with six major banks in the country". 

Combating AML

The Forrester report noted that despite the upward trend of crime, the likes of AI and emerging technology are helping combat the rise of AML crime.

For the finance sector, as AML challenges rise, tools such as generative AI, explainable AI (XAI) and behavioural biometrics are being used to counter some activities.

Generative AI is being used to boost risk management insights and scores, while XAI is found to help understand how AML algorithms arrive at their decisions.

Meanwhile, behavioural biometrics has been implemented across many banking functions to add an extra layer of mule account detection.

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