The European Banking Authority published its 2025 Opinion and related report on money laundering and terrorist financing (ML/TF) risks affecting the EU financial sector, warning that the risk landscape is shifting amid geopolitical developments, legislative reforms and digitalisation. It argues that consistent application of the new EU legal framework is central to addressing emerging vulnerabilities, while noting that increased supervisory engagement has left some sectors better equipped to tackle financial crime. The assessment highlights weak anti-money laundering and countering the financing of terrorism (AML/CFT) controls and governance in FinTech firms, with 70% of competent authorities reporting high or rising ML/TF risks and pointing to growth being prioritised over compliance. Over half of serious compliance failures reported to the EBA’s EuReCA database involved improper use of RegTech tools, reflecting poor implementation driven by insufficient expertise and oversight. Crypto-assets remain a high-risk sector, with a 2.5-fold increase in authorised crypto-asset service providers (CASPs) between 2022 and 2024, alongside concerns about ineffective AML/CFT systems and attempts by some CASPs to bypass regulatory oversight. The report also flags AI-enabled fraud, as criminals use AI to automate laundering schemes, forge documents and evade detection, and it notes challenges in implementing EU restrictive measures due to sanctions complexity and inadequate systems. The Opinion is issued under Article 6(5) of Directive (EU) 2015/849 and is intended to inform the European Commission’s Supranational Risk Assessment, competent authorities’ risk assessments and the EBA’s policy priorities. The EBA’s new Guidelines on restrictive measures are referenced as a harmonisation tool and are stated to apply from end-2025.
European Banking Authority 2025-07-28
European Banking Authority publishes 2025 opinion warning of rising EU ML TF risks from fintech weaknesses, RegTech misuse, crypto and AI enabled fraud
The European Banking Authority's 2025 Opinion and report on EU financial sector money laundering and terrorist financing risks highlights shifting risks from geopolitical changes, legislative reforms, and digitalisation. It underscores weak AML/CFT controls in FinTech firms, with 70% of authorities noting high or rising risks, and flags serious compliance failures linked to improper RegTech tool use. Concerns about crypto-assets, AI-enabled fraud, and challenges in implementing EU restrictive measures are raised, aiming to inform the European Commission’s Supranational Risk Assessment and EBA policy priorities.