ComplyAdvantage, the financial crime risk management firm, has released new data revealing that financial institutions are struggling to keep pace with the speed and sophistication of AI-enabled criminal networks.
The findings, published in the State of Financial Crime 2026 report, come as MPs warn regulators that a “wait-and-see” approach to AI risks causing serious systemic harm to the UK financial system.
Exposure to new threats
According to the survey of over 600 global C-suite and senior compliance leaders, firms now rank cybercrime (54%), organised crime (37%), and human trafficking (33%) as the areas where they feel most exposed and in need of greater regulatory guidance.
The report highlights a widening gap between criminal capability and institutional defence. While criminals are leveraging AI to move money and victims at speed, financial institutions are hampered by operational limitations. 99 per cent of respondents acknowledged flaws in their detection abilities, citing issues such as failings in sanctions screening (23%), siloed datasets (22%), and a lack of real-time visibility (21%).
The AI reality gap
Despite the hype surrounding artificial intelligence, the report exposes a stark disparity between expectation and execution. While 100 per cent of respondents expect positive outcomes from AI, only one-third (33%) currently use the technology for essential tasks like customer screening and transaction monitoring.
Furthermore, over 40 per cent of firms admit they do not have a fully established AI assurance programme in place, suggesting many have yet to meet the governance benchmarks required for widespread deployment.
Iain Armstrong, executive director, financial crime compliance strategy at ComplyAdvantage, commented: “Criminal networks do not care how advanced your AML roadmap is, or whether regulation is six months or six years away. They move money and victims at speed, and every crack in the wall helps them to do it. If defences are fragmented or slow, fraud scales, money mules multiply, and human exploitation becomes easier to hide.”
Operational bottlenecks
The report also sheds light on the “operational reality” of compliance teams. While 61 per cent of firms view AI-powered real-time monitoring as their primary defence, the resolution process remains heavily manual. 89 per cent of institutions reported taking up to 30 minutes to resolve a single transaction monitoring alert—a lag that allows illicit activity to progress while teams struggle to keep up.
The human cost
The data underscores the tangible impact of these financial control failures. With human trafficking identified as a top concern, experts are calling for a shift in perspective.
Rebekah Lisgarten, CEO of STOP THE TRAFFIK, said: “Human trafficking is not only a serious human rights abuse, but is an illicit business model driven by financial gain. Traffickers rely on legitimate financial systems to launder their illicit proceeds… Implementing faster, intelligence-led controls that cut off traffickers’ ability to profit is one of the most powerful ways to prevent exploitation before it occurs.”
Future outlook
Looking ahead, firms expect a surge in sophisticated crimes over the next year, led by high-end money laundering (41%), trade-based money laundering (38%), and terrorist financing through crowdfunding (30%).
Without a robust, holistic AML platform to alleviate existing burdens, the report warns that institutions will struggle to pivot toward these more severe, AI-driven threats.
