EBA Warns of High AML Risks in FinTech Sector for 2025
The EBA’s 2025 Opinion reveals 70% of EU regulators believe high AML risk persists in FinTech due to weak compliance controls.
FinTech’s Struggle With AML Frameworks
Many FinTech firms, according to the EBA, still focus on growth ahead of building strong anti-money laundering and compliance programs.
This lack of robust controls creates major gaps that criminals exploit, threatening financial stability and investor trust across multiple European markets.
The authority warns that high AML risk could worsen if firms fail to improve governance and prioritize anti-money laundering measures.
Regulators urge digital finance players to combine innovation with effective, simple, and reliable systems for risk prevention and fraud control.
RegTech Tools Not Always Effective
The EBA highlights that many RegTech tools aimed at improving compliance are often poorly implemented and lack proper supervision by companies.
More than half of serious compliance failures in recent years were linked directly to weak adoption of RegTech-based solutions.
This demonstrates that technology alone cannot address high AML risk if businesses fail to invest in skilled compliance teams and oversight.
The report suggests improving human expertise alongside technology to ensure better results in detecting and preventing illicit transactions.
Crypto Assets Pose Persistent Threat
Crypto-asset service providers (CASPs) grew rapidly, with authorisations increasing 2.5 times between 2022 and 2024 across EU jurisdictions.
However, many still lack adequate AML frameworks, while some deliberately avoid regulations, escalating high AML risk exposure in digital currencies.
This sector remains a favourite for bad actors seeking fast, untraceable cross-border transfers to support laundering and terrorist financing operations.
The EBA calls for stricter supervision and unified European standards to close loopholes exploited by non-compliant crypto businesses.
AI-Driven Financial Crime Emerges
Criminals increasingly use artificial intelligence to automate laundering, forge identities, and bypass traditional fraud detection tools in financial systems.
Financial institutions are struggling to keep pace with these evolving threats, leaving gaps that attackers easily exploit across several platforms.
Without proper AI governance, high AML risk will keep growing, affecting market safety, stability, and long-term investor confidence.
The EBA recommends immediate development of stronger AI monitoring guidelines to counter automated laundering schemes effectively.
Sanctions Compliance Still Lacking
Many institutions across Europe still fail to fully comply with restrictive measures and complex sanctions regimes set by EU regulators.
The lack of reliable monitoring systems allows illicit financial activities to bypass controls, increasing vulnerabilities for banks and FinTech players.
To address this challenge, the EBA plans new harmonised guidelines by late 2025 to improve sanctions compliance implementation consistently.
These measures aim to reduce high AML risk while ensuring safer and more reliable international financial operations across the bloc.
EBA’s Call to Action for 2025
The EBA insists that consistent application of new EU rules will be crucial to tackling growing money laundering and terrorist financing threats.
Supervisory engagement has improved some sectors, but significant gaps remain, especially within fast-growing digital financial platforms.
Collaboration between regulators, technology providers, and FinTech firms is essential to strengthen AML frameworks and reduce sector-wide vulnerabilities.
Reducing high AML risk in 2025 depends on aligning rapid technological progress with strict, reliable, and well-enforced compliance measures.
