Almost three quarters of senior global financial services professionals expect financial crime risk to rise in 2025

• Cybersecurity threats and data breaches rank as top risk factor, cited by 68% of those who expect an increase  

• Half (49%) say that keeping up with evolving regulations is the biggest challenge in sanctions compliance

• Just one-third (33%) of professionals feel “very prepared” to address geopolitical risks over the next 12 months

Kroll, the leading independent provider of global financial and risk advisory solutions, has today released the 2025 Financial Crime Report, finding that over 71% of executives across financial and professional services anticipate a rise in financial crime risks in 2025

The report highlights cybersecurity, AI, regulatory complexity, geopolitics and sanctions as key issues in the fight against fraud and financial crime in 2025.

Cybersecurity leads the charge in risk exposure

Cybersecurity threats have been a growing trend in recent years, and the data shows that concern is on the rise and the perception of AI in financial crime compliance is shifting.

• Over two thirds (68%) of financial services professionals who expect financial crime risk to increase in the year ahead identify cybersecurity as the biggest driver of exposure and nearly half of organizations (49%) expect to invest in AI solutions as part of their efforts to tackle financial crime.
• However, just a fifth (20%) of respondents believe AI has had a “very positive” effect on their financial crime compliance framework – down from 37% in 2023.
• Over a quarter (27%) of organizations have AI and machine learning as an established part of their financial crime compliance programs, exceeding 2023 levels (24%).
• AI is primarily being used to identify suspicious behavior (63%), followed by network analysis (54%) and identifying risk signals (44%), as firms seek to enhance detection capabilities.

Read More: AI and Data Interoperability are Crucial for Success in the Financial Industry

Evolving regulation raising concerns

Financial and professional services firms are preparing for greater enforcement action on regulations and evolving compliance challenges in 2025 – but a significant portion lack confidence in their ability to adapt, particularly with sanctions.

• Over half (55%) of respondents expect enforcement action against financial crime to increase and nearly two thirds (59%) see corporate transparency requirements changing within the next year.
• Nearly half of respondents (49%) say keeping up with regulatory changes is the biggest challenge in sanctions compliance, up from one-third (34%) in 2023.
• Globally, just under two in five (39%) senior financial professionals say that they are “very confident” in their organization’s sanctions screening capabilities, with the U.K. (34%) trailing the global average.
• While 37% of organizations screen entirely in-house, using a third party (34%) and hybrid approach (28%) are becoming increasingly common.

Geopolitical risks high on the agenda

2024 was a year of notable geopolitical events and 2025 has already begun with arguably more disruption than was seen through last year. Indeed, organizations are factoring this into their ongoing compliance efforts.

• Looking ahead through 2025, just one-third (33%) of respondents say that they are “very prepared” to address geopolitical risks over the next 12 months and only 38% are “very confident” in their financial compliance program’s ability to detect emerging geopolitical threats.
• Among those who were less than “very confident” in their program’s ability to assess their supply chains for threats, more than half (56%) of global respondents identified cybercrime as the biggest challenge to their programs in 2025. This was followed by political instability (35%) and geopolitical risk (26%).
• The insurance sector appears particularly exposed to geopolitical challenges, with nearly three-fifths (58%) of professionals expressing concern over potential new economic and financial sanctions.

David Lewis, Managing Director, Investigations, Diligence and Compliance at Kroll, says, “From cybersecurity threats to geopolitical uncertainty, firms in 2025 are facing an incredibly complex risk environment. The changing nature of risk analysis means that businesses are expected to stay abreast of a variety of risk factors, but this becomes increasingly difficult the faster that illicit actors develop new tricks and tools.

What is measured can be managed, as the saying goes, and our 2025 Financial Crime Report is intended to give compliance and security teams a better measurement of the risks they face today. Firms that can best direct efforts to meet this changing landscape will be the ones that succeed, even as the outlook for financial crime grows more concerning by the year.”

Brent Tomlinson, Co-President of Risk Advisory at Kroll, says, “It is a worrying, but not surprising, revelation that sophisticated financial risk and compliance leaders feel less prepared than ever to prevent and mitigate rising financial crime risks in today’s complex global environment. We are facing a geopolitical landscape of increased macro uncertainty, more aggressive threat actors and diminished regulatory predictability.

While we’re yet to see exactly what this year will hold, financial crime remains a major global concern and professionals in all sectors will need to be on the top of their game, partnering with experts on risk analysis, decision-making support, and mitigation plans, if they are to protect and grow their businesses.”

Read More: The Digital Divide: Insurance Industry Races to Bridge Tech Gap Amid AI Push

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