When illicit financial activity climbs to an estimated $4.4T in a single year, the number becomes staggering. But the more destabilizing story is the rate of change behind it: a 19.2% compound annual growth rate (CAGR) from 2023 to 2025—far outpacing global GDP growth of 3.6%. That level of compounding signals that the global financial system is being tested by adversaries who are scaling faster than many control environments can adapt.
Highlighted in Nasdaq Verafin’s 2026 Global Financial Crime Report, this sharp rise reflects a genuine shift in criminal capability: faster monetization, broader reach and better conversion of attempts into realized losses. In other words, if this trajectory persists, the question quickly becomes not how big illicit flows are today — but how embedded they become tomorrow.
What’s Driving the Surge: Five Accelerants
No single factor can explain the trillion-dollar growth in illicit activity. What’s happening today is a result of a convergence of accelerants — each amplifying the others and compressing the time institutions have to detect, prevent and recover funds.
1) Artificial Intelligence: Higher Volume, Higher Hit-Rate, Faster Iteration
Artificial intelligence (AI) lowers the marginal cost of fraud at scale — automating outreach, personalizing lures, and developing more convincing deepfake impersonations. The result is simple: more attempts and a higher percentage that succeed. It also fuels an arms-race dynamic — criminals adopt quickly and innovate in near real-time, while institutions often move slower due to governance, model risk management, and regulatory uncertainty.
2) Industrialized Criminal Networks: Multinational Enterprise Models
Financial crime is no longer dominated by lone actors and one-off schemes. Highly organized operations have formed with a cast of entities and players — scam compounds, professional enablers and criminal supply chains spanning fraud, mule recruitment, and money laundering. These networks share playbooks, replicate what works across jurisdictions, and distribute activity so it stays below any one institution’s visibility thresholds. This level of organization and sophistication resembles the blueprints of a scaled business: repeatable processes, specialization and throughput.
3) Faster Payments: Shrinking the Intervention Window
Instant and near-instant payment rails are a major societal and commercial advancement — but they are also an accelerant for fraud and laundering. Funds can move through mule accounts “in hours,” often crossing borders (or converting into harder-to-recover forms) before a victim even realizes they’ve been deceived. The practical effect is that prevention becomes more valuable than investigation: by the time a case is confirmed, the window of recovery may already be closed. Without near-real-time intelligence sharing across institutions and jurisdictions, faster payments elevate the risk of faster fraud.
4) Cross-Border Connectivity & Regulatory Fragmentation: Endless Paths to Launder
Global payments are more interconnected every day — creating efficiency but also making illicit money increasingly difficult to track. It is estimated that $482.9B flowed across international borders in 2025 (about 11% of global illicit flows), highlighting that cross-border movement has become a core laundering mechanism. Criminal networks deliberately route funds through multiple jurisdictions to exploit regulatory fragmentation, varying data standards and inconsistent information-sharing regimes. Professional money laundering networks then industrialize these processes, leveraging complexity to their advantage.
5) Rise of Authorized Fraud Scams: The “Path of Least Resistance”
As institutions strengthen controls against traditional bank fraud, criminals have found ways to bypass them by targeting the customer. Authorized push payment (APP) fraud and related scam typologies scale because the victim is manipulated into initiating the transaction — short-circuiting many bank-side safeguards. Consumer fraud scams reached $62B in 2025, growing at 19.3% CAGR since 2023, more than double the growth rate of bank fraud losses. When combined with instant payment rails, APP fraud scams make recalls and reversals far less effective.
What the Dramatic Rise in Illicit Flows is Really Telling Us
At $4.4T, illicit financial flows have reached a scale that resembles major national economies. With an increase of $1.3T since 2023, this growth implies that controls are being outpaced, that criminal capital is being reinvested into more capable operations, and that successful tactics encourage increased focus and iterations — more money funding better tools, better recruitment, and broader global reach.
The dramatic rise in illicit financial flows over a two-year period suggests a recent trigger such as rapid AI adoption, the maturation of scam supply chains, and the mainstreaming of instant payments. While some measured increases can reflect improved detection and reporting, the direction and pace remain alarming: whether the system is experiencing more crime or simply seeing more of it, institutions are confronting a larger, faster-moving problem set that requires earlier intervention and broader coordination.
What this Means for Financial Institutions Globally
For financial institutions, the implication is direct: your risk exposure is increasingly shaped by what happens outside your walls — across counterparties, payment rails, jurisdictions, and digital platforms. Stopping illicit flows requires shifting from institution-centric controls to ecosystem-aware defense.
- Design for immediacy, not minutes or days. Faster payments compress detection and recovery windows. That pushes investment toward real-time monitoring, pre-transaction risk signals, and rapid holds/recalls where permissible — supported by clear decisioning playbooks and 24/7 operational readiness.
- Detect networks, not just anomalies. Industrialized rings distribute behavior across accounts, institutions, and geographies. Controls that focus only on single-customer thresholds will miss the pattern. Institutions need network analytics, entity resolution, and typology-aware models that connect dots across customers, mules, merchants, and beneficiaries.
- Treat scams as a core financial crime discipline. The fastest growth is increasingly in customer-manipulation fraud. That demands scam-specific prevention journeys: contextual warnings, step-up friction, beneficiary intelligence, payment purpose validation, and post-transaction intervention models tuned to APP scenarios.
- Operationalize intelligence sharing. When criminals reuse scripts, mule accounts, and beneficiary destinations, speed of sharing becomes a competitive advantage. Public-private partnerships and cross-institution sharing — done responsibly and within legal frameworks — can turn one institution’s detection into sector-wide prevention.
- Meet AI with AI. Adversaries are already using AI to scale attacks. Institutions need governed AI adoption — model risk controls, monitoring, explainability where needed — that improves detection and customer protection without slowing response to the point of irrelevance.
- Cross-border interoperability. Fragmentation is a laundering feature. Financial institutions can advocate for better data standards, faster information exchange, and practical coordination mechanisms with partners to reduce the jurisdictional seams exploited by criminals.
The Imperative: Slow the Growth Before it Becomes Structural
The global financial system can absorb losses — it cannot sustainably absorb a criminal industry growing faster than the economy that supports it. A $1.3T rise in illicit financial flows from 2023 to 2025 is a warning: either financial institutions bend the curve through coordinated, real-time, intelligence-led prevention — or illicit flows become even more deeply intertwined with legitimate commerce and cross-border finance. Curbing this growth requires a balanced approach that considers compliance, reputation, operational loss, but most importantly, protecting trust in the system itself.
For an in-depth look, read the full report: 2026 Global Financial Crime Report
About the Author
MAURICEO CASTANHEIRO
VP – Head, International Payments Fraud, Nasdaq Verafin
Mauriceo Castanheiro (CFE, CAMS) is the Head of International Payments Fraud at Nasdaq Verafin with over two decades of experience combating fraud in the financial sector. In his senior advisory role at Nasdaq Verafin, Mauriceo collaborates with global banks, including Tier 1 institutions, financial industry partners, and key influencers, strengthening Nasdaq Verafin’s reputation as a thought leader and fostering industry-wide cooperation. Having held pivotal positions in fraud management at several of Canada’s largest banks, encompassing roles in business intelligence, operations, analytics, and strategy, Mauriceo offers extensive expertise to Nasdaq Verafin and contributes significantly to the development of innovative solutions for financial crime prevention.
