UK financial institutions are stepping up their fight against money laundering and fraud, however this is becoming the bare minimum required. According to BioCatch’s inaugural Dark Economy Survey, 65% of UK fraud and compliance leaders believe criminal enterprises are now more sophisticated at laundering money than the banks trying to catch them – outpacing defences with growing agility.

The report, Insights into the Invisible: Perspectives on Evolving Fraud and AML Challenges, draws on responses from 800 financial crime professionals across 17 countries, including the UK, and reveals mounting concern about the Dark Economy – criminal networks that exploit the global financial system to move illicit funds tied to human trafficking, drug crime, and terrorism.

Globally, 84% of respondents said tackling this hidden layer of criminal finance is now critical to any serious fraud prevention strategy.

Despite this urgency, engagement with law enforcement remains limited. Just 19% of UK professionals said they involve law enforcement in more than half of suspected financial crime cases, suggesting a gap between internal detection and external enforcement.

UK financial institutions do, however, stand out globally for their use of behaviour-based analytics. Over four in five (84%) respondents said their organisations already employ this type of technology to detect fraud – well above the global average of 76%.

“The Dark Economy is a real phenomenon; it poses a significant threat to banks and their customers. Combatting that threat necessitates that banks embrace behaviour to identify risk,” said BioCatch’s director of global advisory for EMEA, Jonathan Frost

The report also found that spending is set to rise, with 57% of UK respondents expecting their organisations to increase their investment in fraud and AML technology over the next year. Many cited growing needs in data privacy (39%), cybersecurity (36%) and managing complex regulation (31%) as the top areas driving investment.

But even with rising tech budgets, UK institutions are feeling the financial strain. Nearly half (44%) of UK respondents said their organisations suffer annual fraud losses between £8 million and £20 million – well above the global average of 26% for this bracket. An additional 11% reported losses between £20 million and £40 million, and 2% cited fraud losses exceeding £40 million annually.

By contrast, the most commonly reported global loss bracket was £4 million to £8 million, cited by 27% of respondents.

Part of the problem may be tied to persistent gaps in detection and collaboration. Only 18% of global respondents said they felt confident identifying money mule accounts, despite widespread agreement that these accounts are a key mechanism for laundering funds. In fact, BioCatch customers alone identified and acted on nearly 2.3 million mule accounts in 2024 – and more than 500,000 already in 2025.

“As these numbers only continue to grow, it’s clear criminals are almost certainly laundering money through every major bank on the planet,” said Thomas Peacock, BioCatch’s director of Global Fraud Intelligence.

Intelligence sharing among banks is frequent but fraught with challenges. Nearly half (46%) of UK respondents said they share intelligence with other banks weekly, but cited barriers including privacy rules (28%), data breach concerns (25%) and fears of information misuse (25%).

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While 77% of global respondents expressed optimism that banks are starting to win the fight against financial crime, only 55% of UK professionals said they feel their own organisations are truly making an impact—indicating a gap between global messaging and local confidence.

Technological advancement has also cut both ways. Many UK respondents pointed to emerging tools being exploited by criminals: 84% cited dark web forums, 82% said AI, and 74% flagged social media as key enablers of new fraud strategies.

Still, as $3.1 trillion in illicit funds moved through the global financial system in 2023 alone (according to Nasdaq’s Global Financial Crime Report), BioCatch and its partners warn that without stronger regulatory intervention and cross-border cooperation, banks may remain one step behind.