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The financial services group SEB has established a new Anti-Money Laundering Compliance Unit in recognition that financial crime remains one of the key challenges for the financial services industry. The new unit has been populated by a very experienced team that includes the former Head of Intelligence Development, Investigations and Analytics at Nordea and a senior figure from the Swedish police.

Iceland is an innovative place for startups and the country has a strong track record in terms of pioneering tech such as AML Compliance Software. The innovation culture here is very much focused on two areas, the first being blockchain-driven innovation that is crossing the boundaries between Web3 commerce, gaming and FinTech and the second being the rising number of AML startups. Companies like Lucinity are changing the tools that organisations have to battle financial crime using cutting edge technology, such as artificial intelligence. Iceland is a country that is pushing the boundaries across all elements of tech infrastructure - three Non-Fungible Token (NFT) marketplaces have launched in the past few years alone - and helping to drive development. The country's burgeoning Web3 hub shows just how much more important digital assets are becoming.

16 billion Euros is reportedly laundered in the Netherlands every year. This is a country that has a very highly developed financial sector, as well as many other significant risk factors such as being a major commercial transportation hub. In fact, the ratio of banking assets to the GDP of the Netherlands is 314% (in 2020). As a result, the threat of money laundering in the Netherlands is significant and in recent years there have been some sizable sanctions handed out to banks here. For example, the Dutch bank ABN Amro was fined 480 million Euros for issues that led to a number of its accounts being used for money laundering. Rabobank - another Dutch bank - was also fined for poor AML practices and not having customer files properly organised.

The challenge in developing new and ever-more effective Anti-Money Laundering Software is being able to think like the criminals to see how they might game the system. There is no doubt that advanced technology, such as Artificial Intelligence (AI) can help to give organizations the edge when looking at how to do this. AI or machine learning tools can help to replace - or augment - more traditional rule-based systems that have in the past been easier to bypass. This can come with some resistance, as it's these systems that most bank regulatory and internal controllers are the most familiar with. However, adapting Anti Money Laundering Software to integrate everything that AI has to offer can be a real benefit in the fight against money laundering on a global level.

Crypto policy conversations are taking place on a global level today, including across the USA and Canada. In any debate over policy there is always going to be a need to balance conflicting opposites, such as innovation and safety, and the rights of the individual vs the rights of everyone else. When it comes to crypto policy this potentially becomes even more acute thanks to the significant stakes at play and the speed at which the technology evolves. Given that crypto itself is a technology - Layer 1 and Layer 2 blockchains, dApps, zk-SNARKS etc - the answer to crypto policy questions is likely to lie in other forms of technology, such as AML Software. The tech universe capable of supporting crypto is something that policy makers need to be aware of, especially as these technologies evolve to offer even more opportunities to counteract the money laundering threat.

Despite the fact that combating financial crime has been a priority for decades, it's estimated that less than 1% of the global flow of illicit cash is captured and stopped. However, that's a figure that it is hoped will rise significantly thanks to tech such as AML Compliance Software. When it comes to financial regulation and the costs of compliance, for most banks and financial institutions, anti-money laundering measures are by far the biggest expense. In response to this we have begun to see more RegTech firms offering a greater range of data-driven solutions to compliance issues. There has also been significant reform of the legislation that governs AML compliance, in particular the Anti-Money Laundering Act of 2020. It's these developments that are providing the hope that the 1% figure can be substantially increased.

Collaboration between the US and the UK brings together two of the most innovation-rich technology cultures in the world when it comes to AML Compliance Software. With this in mind, a new 'prize challenge' programme was announced over the summer that is designed to drive innovation to find new ways to combat financial crime. The motivation for the collaboration comes from the issues that both countries have when it comes to putting effective anti-money laundering measures in place. The hope is that solutions will be found that will enable machine learning models to be focused on data that is drawn from many different sources without that data ever leaving a safe environment (this is called federated learning).

There has been plenty of coverage of the "Travel Rule" recently, which is the EU's tool for ensuring that virtual crypto exchanges are capturing and sharing customer details. However, that's not the only way in which the EU has been focusing on crypto compliance risk regulation recently. There has also been a concerted effort to create a pretty expansive regulatory framework to bring harmony and clarity to member states across the EU. The landmark crypto compliance risk regulation framework is called Markets in Crypto Assets (MICA) and it applies to issuers of unbacked crypto assets and stablecoins as well as the myriad of wallets and trading venues where these are likely to be held.

Artificial Intelligence (AI) has a lot to offer when it comes to anti-money laundering monitoring. This advanced technology has the potential to make AML measures even more effective and to enhance investments in anti-money laundering monitoring. That's why so many businesses are now planning to increase the volume of investment in AI for this purpose. In fact, one recent survey found that 57% have either deployed AI in anti-money laundering monitoring processes or are planning to do so in the near future. And a third of finance firms are accelerating their use of AI in order to make existing measures more effective. These are vital steps for any business in the finance industry to take, especially as the UN estimates that $2 trillion in tainted money is moved illegally on a global level every year.

The Financial Action Task Force (FATF) has emphasised how important it is for Netherlands banks to ensure that legal persons aren't being used for criminal interests going forward. The FATF released the latest Mutual Evaluation Report in August of this year with a focus on how more resources are necessary to help address the AML compliance risk of beneficial ownership. Beneficial ownership relates to those who own, control or benefit from specific bank accounts. Where information about who these natural people actually are isn't clear it creates a lot more room for money laundering activities to take place unchecked. Focusing on addressing the AML compliance risk of beneficial ownership is something that Netherlands banks will now have to make a priority as a result of the spotlight that has been placed on it thanks to the FATF and its latest report.