Kroll’s 2023 Fraud and Financial Crime Report shares the findings from a survey of 400 executives across the globe conducted in Q1 2023. This report navigates the complex, innovative and ever-changing landscape of financial crime and technology and shines light on the more than USD 800 billion laundered every year.
We began 2023 with ongoing economic pressures, geopolitical tensions, an increasingly diverse regulatory environment and exciting advancements in AI. International headlines were dominated by revelations of Ponzi schemes, government scandals, public corruption, greenwashing, sanctions evasion and other economic crimes. Behind these headlines were passionate prosecutors, attorneys, law enforcement officials, regulators, compliance officers and risk analysts working together to combat the rising tide of financial crime. A better understanding of the state of the fight against financial crime has become more important as new technology unfolds.
Our survey found that most companies anticipate an increase in financial crime risks over the next 12 months and have doubts about the capacity of governments to keep pace with technological change and the increase of criminal activity. To close this gap, more than two-thirds of respondents said they were prioritizing their own technology investments. Questions remain regarding how these investments should be made and what else can be done to combat financial crime. This year’s report approaches these questions through a combination of survey results and expert commentary from Kroll’s global risk experts, focusing on anti-money laundering (AML), anti-bribery and corruption (ABC), sanctions, cryptocurrency and environmental, social and governance (ESG).
This year’s respondents represent eight countries including the U.S., the UK, France, Germany, Brazil, Mexico, Singapore and the UAE, with the vast majority working in highly regulated industries. Based on respondent insights, this report individually analyzes results at macro and micro levels and demonstrates a broad spectrum of geographies, challenges and Kroll expertise.
Thank you for spending time to review these results, and as always, Kroll is available to further discuss the details of these findings and to partner with you in improving your financial crime compliance, readiness and program objectives.
The incredible pace of innovation in new technology comes at a time of uncertainty caused by war, geopolitical tensions, the crypto rollercoaster, speculation in financial markets and the related increase in cybercrime and cybersecurity risks. Kroll’s 2023 Fraud and Financial Crime Report survey results show that to cut costs and improve systems and controls, companies are rushing to embrace anti-money laundering (AML) technology. This creates risks as well as opportunities.
As the global landscape becomes increasingly fraught with risk, anti-bribery and corruption (ABC), enforcement is emerging as a salient concern among executives and risk management professionals within financial institutions and multinational corporations. Sixty-four percent of our survey participants anticipate an increase in ABC enforcement actions within the upcoming year, with a majority citing third-party gatekeepers as a significant contributory factor to escalating financial crime risk.
These concerns call for a nuanced examination, delving into the societal and economic ramifications of corruption, and the proliferating risk of economic crimes.
Learn More About Corruption and Bribery
Kroll’s 2023 Fraud and Risk Report notes 44% of global survey respondents cite consistent compliance across geographies as the top challenge. Sanctions compliance and rapidly evolving sanctions programs continue to strain multinational corporations and banks. Russia's war on Ukraine and evolving geopolitical landscapes have led to a massive expansion of sanctions programs and risks, prompting organizations to enhance their supply chain controls and risk management strategies. It is critical to adopt best practices, invest in technology and collaborate with peers and government regulators.
Kroll’s 2023 Fraud and Financial Crimes Report provides a stark reminder that financial crime risk remains as potent as ever with 69% of respondents expecting financial crime threat to increase over the next 12 months. Delving deeper into this data, at least 33% of respondents expect specific risks posed by cybersecurity and data breaches to crystallize, suggesting a third of respondents’ entities will suffer some kind of adverse event.
Learn More About Data and Financial Crime
Nearly half of Kroll’s Fraud and Financial Report survey respondents agree or strongly agree that carbon credits are an effective solution for fighting climate change. That raises some concerns in the current environment. Given the lack of clear rules for carbon credit generation or definitive best practices around their proper use, companies should be especially vigilant when purchasing and utilizing them in broader climate reduction strategies and activities.
In a global environment of evolving economic pressures, geopolitical tensions and cutting-edge technological advancements, the significance of an adaptive, tech-driven strategy in combating financial crime is more critical than ever. Our findings spotlight the importance of technological adoption in anti-money laundering efforts, alongside the complexities of customer onboarding and monitoring.
The recurrent theme of balancing transparency and privacy, notably in beneficial ownership, calls for cautious navigation. Likewise, in environmental, social and governance reporting, businesses must align with evolving standards to avoid the pitfalls of greenwashing and fraud.
In this webinar, Kroll's experts discussed key takeaways from this year's Fraud and Financial Crime report and strategies for getting ahead in the evolving fight against fraud and financial crime.
It is fair to say that the past four years have been challenging: Brexit, the COVID-19 pandemic, economic recession, unprecedented inflation and the war in Ukraine. Each of these events has paved the way for an uptick in criminal activity.
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Customer onboarding can be overshadowed by other aspects of an organization’s compliance program, often viewed as a “check-the-box exercise” that doesn’t necessarily make the headlines.
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Financial crime comes in all shapes and forms, from drug cartels laundering profits through legitimate businesses, to the rich and powerful offshoring their wealth, to students used as money mules buying million-dollar properties for unknown individuals.
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There’s a saying attributed to W. Edwards Deming, the father of the mid-1980s quality movement: “In God we trust. All others must bring data.” It can hardly be truer than when applied to the challenge of fighting financial crime and the relevance of accessing the right data at the right time.
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Corruption presents a daunting challenge to societies and economies worldwide. It undermines development, destabilizes governments, erodes societal trust and curbs economic growth.
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Sanctions are employed by governments as a means to change the behavior of a country, regime, individual actor or company.
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There are a variety of risks that need to be considered in the case of crypto—market, regulatory and cyber risks to name a few.
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The last several years have seen a material increase in the use of carbon credits and offsets by companies as part of broader global efforts to address climate change and reduce carbon emissions.
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Firms must make a focused effort to explain and backstop their ESG initiatives and provide the steps they have taken or will need to take to achieve their goals.
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Kroll’s anti-money laundering (AML) solutions are designed to help minimize the risks associated with money laundering and other illicit activities and to ensure compliance through the development and management of ongoing compliance programs and processes.
Kroll helps clients navigate the complexities of today’s regulatory environment through a broad suite of anti-money laundering compliance screening and due diligence offers.
Kroll helps clients mitigate and respond to the risks associated with international anti-corruption legislation.
Proactively detect fraud and corruption with Kroll’s risk, investigations and data analytics experts, supported by an award-winning software.
