NEW YORK—Global economies can save $3.13 trillion by using AI to detect and prevent money laundering and terrorist financing, which costs trillions of dollars annually, a new study shows.
The report, published by Napier AI in partnership with GlobalData, also found that financial institutions could capture significant savings from the move.
“While financial institutions spend heavily on crime compliance, the investment is justified when it recovers billions and strengthens safeguards. The focus should be on spending effectively, using AI tools to boost both compliance and economic recovery,” the report states.
“Financial hubs are much more vulnerable to financial crime,” said Dr. Janet Bastiman, Napier AI’s chief data scientist.” Mature economies like Canada, the U.S. and U.K. have effectively balanced open banking and AI innovation with the cost of managing financial crime risks. Fast-growing economies with strong financial services industries are looking to find this balance to reduce financial losses to the black market.”
Among the report’s key findings:
- North America, the Nordics and Central Europe rank at the top, respectively, in terms of geographic regions with the smallest percentage of GDP lost to money laundering
- Italy, Poland and the Czech Republic rank at the top, respectively, in terms of countries with the most efficient spend on anti-money laundering
- Regulated firms like banks, payments firms, wealth and asset managers, telcos and insurance companies can save $138 billion on compliance costs by implementing AI into their AML strategies
- 5% of global GDP—roughly $5.2 trillion—is funneled into the black market through money laundering
- Worldwide, the U.S. stands to gain the most from AI-powered financial crime compliance solutions, potentially saving financial institutions $23.4 billion on compliance costs, followed by Germany ($14.2 billion), and France ($11.08 billion)
- The United Arab Emirates has the highest GDP loss to financial crime globally, at 9.32%, followed by Brazil at 8.74%
Read the index here: https://www.napier.ai/ai-aml-index