The revelation comes from The Global State of Anti-Money Laundering report conducted by Feedzai. The report interviewed compliance workers within the sector to better understand the paradigm shift in the anti-money laundering (AML) sector.

It found that generative AI tools like ChatGPT are a major concern for AML practitioners, over even cryptocurrency and blockchain, which were the greatest concerns in last year’s report. According to this year’s report, 46% of AML professionals say they are concerned about the increasing sophistication in money laundering techniques using Al. 

The apprehension around AI comes from its ability to streamline the laundering process – the emerging technology can be used to create false companies, fraudulent invoices, manipulate and fabricate records and statements, as well as identify loopholes in legislation. 

Despite this, many practitioners (33%) are saying AI and machine learning is the most effective tool against money laundering as well. According to the report, 60% of companies using these technologies experienced improvements in their organisation’s AML process. 

Just last month, the Financial Conduct Authority (FCA) chief executive Nikhil Rathi warned that cyber fraud and cyber attacks were becoming more prevalent in the UK’s financial sector. He warned insurers, investors and banks to ramp up spending to combat AI-driven scams. 

In the same speech, he also reinforced the FCA’s commitment to use AI for good, specifically using it to “tackle fraud and money laundering more quickly and accurately and at scale.”

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“As AI is further adopted, the investment in fraud prevention and operational and cyber resilience will have to accelerate at the same time. We will take a robust line on this,” he said.

The report, along with the speech from the FCA, reinforce organisations and compliance workers’ need to embrace AI, but also the formidable challenge that it presents. As the industry navigates this dichotomy, the answer remains that through both human and artificial intelligence, a secure financial system can be forged.