Speech by Director of Horizontal Supervision Directorate, Patricia Dunne, to European Anti-Financial Crime Summit 2025

‘AML and Innovation – Opportunities and Challenges’

Good morning everyone and thank you for the invitation to open this session on maximising technology leverage in financial crime.

In preparing my remarks today I was struck by the contrast between the drivers of financial crime and the methods that underpin it. The motivations that drive financial crime, have basically remained unchanged over the centuries. This stands in sharp contrast with the huge changes we have seen in the methods, frameworks and technology that is used to facilitate it, resulting in financial losses in the trillions every year. This is a world away from the 1930s where the proceeds of crime were literally washed clean through Al Capone’s launderettes.

We are all familiar with how the enormous changes in technology have reshaped financial services, how they are delivered and how consumers engage with these services. This technology has brought significant benefits and advantages across the financial system, with speed and connectivity supporting greater convenience and ease of payments and access to services. But we also know there are risks, particularly when abused by bad actors.

The digitalisation of financial services continues to evolve at a rapid pace with the emergence of new technologies such as generative AI.  Regulators, firms and the wider system must adapt to and keep pace with this change, which includes a greater focus on the identification and, mitigation of risks.

It is against this backdrop of innovation, digitalisation and an increasingly interconnected risk landscape that the Central Bank of Ireland decided last year to evolve our approach to supervision and regulation. We made these changes towards a more integrated approach to supervision to ensure that we continue to be effective as a regulator and well positioned to tackle these increasingly complex risks.

Within the new supervisory framework the Central Bank is approaching AML, fraud, and sanctions through the lens of the financial integrity of the system – which is one of the four safeguarding outcomes we are seeking to achieve. To support this, we are building out a more integrated supervisory framework to look at risk in a more holistic way. We want to take a whole-of-sector, rather than a fragmented approach, and so we are very supportive of emerging EU thinking and the role of AMLA in this space.  

Innovation & AML - opportunities and challenges 

Technological innovation represents both opportunity and risk.  It can provide a solution to, but conversely also be the cause of, financial integrity risks.

We see this in the innovative anti-money laundering) tools and solutions being provided by technological advancements. Unfortunately, we also see it in the inherent money laundering risks in some innovative sectors and new business models. 

Later today, the Summit will be hearing from Catherine Bolle, Executive Director of Europol. I was greatly struck by Europol’s latest Serious and Organised Crime Threat Assessment, published last month¹, It made three core points: 

• First, crime is increasingly destabilising to the EU’s institutions and society, including “through the laundering or reinvestment of illicit proceeds”;
• Second, digital infrastructures are driving criminal operations – “enabling illicit activities to scale up and adapt at unprecedented speed”; and
• Third, AI is “fundamentally reshaping” the organised crime landscape.

As the report notes: “The same qualities that make AI revolutionary – accessibility, adaptability and sophistication – also make it a powerful tool for criminal networks.” Europol cited the case of ChipMixer, an unlicensed cryptocurrency platform taken down in 2023, which may have laundered 152,000 Bitcoins – mostly stemming from criminal activity. 152,000 Bitcoins mightn’t sound huge until you think of its current value in cash terms – about €2.73 billion.

Let me set out the regulator’s perspective on this.

The role of the Central Bank is not to eliminate risks, or stymie innovation, it is to ensure risks and innovation are appropriately managed. Given the potential benefits that the use of SupTech and RegTech can provide, the Central Bank is very supportive of its use where it can enhance effectiveness, provided it is implemented in a responsible manner.

New technologies have the potential to make AML/CFT measures efficient, cheaper and more effective. However those solutions must be proportionate and include safeguards to ensure financial inclusion and avoid unintended consequences such as financial exclusion and potential conflict with competing objectives, such as privacy, equitable outcomes, and vulnerability to abuse.

It is important that the threats and opportunities which these new technologies present are reflected in their development, adoption and regulatory supervision. It is also crucial that the use of innovative tools is compatible with international standards of data protection, privacy, and cybersecurity. 

When used responsibly and proportionally, innovative AML/CFT technologies can help identify risks and focus compliance efforts on existing and emerging challenges - for example, the use of AI, machine learning and pattern recognition to detect fraud and suspicious transactions. By facilitating data collection, processing and analysis, technology can help identify and manage money laundering and terrorist financing risks more effectively and closer to real time.

However, human input and manual checks remain very important. Combining the efficiency and accuracy of digital solutions with the experience, knowledge and analytical thinking of humans, produces more robust systems that can effectively respond to AML/CFT requirements.

‘Combatting Financial Crime’- Innovation Sandbox 

As technology evolves and advances, it is incumbent upon regulators to adapt and respond to these changes and ensure that, collectively and individually, we are at the forefront of protecting the integrity of the financial system and those who use it.

However regulatory and policy developments to tackle financial crime cannot succeed in isolation. For this reason, supervisors are increasingly exploring ways to transform technology from an enabler of financial crime to a tool in its detection, disruption and successful prosecution.  This was a driver in our decision to make combatting financial crime the theme for the Central Bank of Ireland’s first innovation sandbox.

Our aim through the sandbox is to provide a structured environment for firms to develop innovative solutions to combat financial crime in a collaborative environment, ensuring that new technologies are introduced safely and effectively. We hope that the programme will facilitate the development of new ventures and new business models that solve the challenges identified and facilitate the faster and safer deployment of new technologies, products, or services.

The firms participating in the programme are a diverse group of innovators from Ireland, across Europe and the UK, including start-ups, scaling firms, partnerships and established financial services firms. We are looking at issues on a thematic basis and asking a number of specific questions as we work through the issues.

These include what technological solutions can deliver positive outcomes for consumers and firms by supporting them in combatting financial crime and fraud? How can technology be better deployed to detect patterns or other indicators of consumer behaviour that may indicate financial crime? What are the impacts of the changing trends and emerging technologies in financial crime on the regulatory framework? And to what extent do current frameworks enable or hinder the use of technology to combat financial crime?  

While we are still mid process, with workshops planned out to June, we are beginning to build a number of key learnings and observations from the work to date. Some have reaffirmed what we knew from experience while others have provoked different thinking or looking at issues from another perspective.

The learnings reaffirm that collaboration is critical, given that financial crime is not just an issue for the financial sector. There are many organisations involved in the lifecycle of a financial crime, so solving it requires collaboration among all stakeholders.

To successfully reduce financial crime, firms and wider partners must share data and intelligence. This includes the sharing and reporting of fraud information across the ecosystem as well as to relevant authorities and law enforcements agencies.

We are continuing with our workshops, with a showcase planned in June where participants will present their innovative solutions, the progress made, share learnings, and highlight innovative outcomes developed through the programme.

We will share the final outcomes and findings, which we hope will inform further work in this space and in turn encourage and bolster the development of common, innovative solutions that enhance the effectiveness of AML/CFT systems.

Conclusion

Our experience with the sandbox shows the benefits of innovation and looking at things from a new perspective, which will be critical in tackling the risks of financial crime and the abuse of the financial system in the coming years.

However, regardless of how fresh or innovative something is, the role of senior management, good governance, and effective risk management frameworks within firms which deliver for consumers and investors remain critical.

It is only by taking a holistic approach, which takes in this broader view along with a realistic assessment of both the potential positives and limitations, that we can be truly effective in using technology as a tool in the detection and disruption of financial crime.

[1] https://www.europol.europa.eu/cms/sites/default/files/documents/EU-SOCTA-2025.pdf (PDF 25.87MB)