Rising Financial Crime Risks: Insights from Kroll's 2025 Financial Crime Report

As we approach 2025, a recent report from Kroll, a prominent player in global financial and risk advisory, reveals alarming insights about the future of financial crime. According to the findings, a staggering 71% of professionals in the financial sector expect financial crime risks to escalate significantly in the upcoming year. Notably, the report identifies key areas of concern—including cybersecurity threats, evolving regulations, and geopolitical risks—that will define the landscape of financial crime compliance going forward.

Cybersecurity: The Foremost Risk Factor

Cybersecurity has emerged as a pivotal threat in financial crime, with 68% of respondents citing it as the primary driver behind increasing exposure. As financial firms navigate complex challenges, nearly half of them (49%) are prepared to invest in AI-driven solutions to combat financial crime. However, the overall sentiment regarding the effectiveness of these AI tools appears to be waning. Just 20% of professionals expressed that AI has had a profoundly positive impact on their compliance frameworks— a notable drop from 37% in 2023.

Interestingly, while a quarter of organizations now incorporate AI and machine learning into their compliance programs, the focus remains on identifying suspicious activities, conducting network analysis, and recognizing risk signals. This shift in approach indicates a growing reliance on technology to enhance detection capabilities, albeit with mixed confidence in its effectiveness.

Evolving Regulations: A Growing Concern

Kroll's report highlights regulatory compliance as a significant concern for financial services in 2025. With many firms anticipating stricter enforcement of financial crime regulations, only 39% of senior professionals feel “very confident” about their organizations’ sanctions screening abilities. The percentage of those who see keeping up with regulatory changes as a daunting challenge has risen from 34% in 2023 to 49%. Organizations must grapple with the increasing complexity of sanctions and transparency requirements in a rapidly evolving regulatory landscape.

Geopolitical Risks: An Increasingly Complex Issue

The unpredictability of geopolitical events has called attention to how these factors can influence financial crime risks. Only a third of financial professionals claim to be adequately prepared to confront geopolitical threats in the coming year, with many indicating that cybercrime is the most significant challenge before them. Political instability is also a key concern, indicating that an increasing number of firms must prepare for a more diverse set of risks. This is particularly evident within the insurance sector, where nearly 58% of professionals express heightened concern over potential sanctions impacting their operations.

Expert Insights

David Lewis, Managing Director at Kroll, states that firms are now operating in a convoluted risk environment marked by cybersecurity threats and geopolitical uncertainties. The need for businesses to adapt their risk assessment strategies is becoming increasingly urgent. It’s vital that compliance and security teams prioritize awareness of these evolving threats to better safeguard against financial criminal activity.

Brent Tomlinson, another top executive at Kroll, emphasizes the pressing need for risk and compliance professionals to elevate their vigilance. In a world rife with complex global challenges, those organizations that can effectively partner with risk experts and adapt to the changing landscape will likely be the ones to thrive as financial crime risks grow.

Conclusion

The insights provided in Kroll's 2025 Financial Crime Report present a cautionary tale for professionals in the financial services sector. As risks continue to proliferate, the industry must brace for the challenges ahead that encompass cybersecurity, regulatory compliance, and geopolitical considerations. Organizations must remain proactive, nimble, and well-informed in their strategies to combat the looming threat of financial crime, ultimately ensuring the safety and sustainability of their business operations in the year to come.