AML & CTF: Protecting the Economy, Ensuring Compliance

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF): Safeguarding the Global Economy and Enhancing Financial Compliance

In a world facing growing challenges from increasingly complex financial crimes, money laundering and terrorist financing stand among the top threats undermining the stability of economic and security systems worldwide. According to United Nations estimates, between 2% and 5% of global GDP - approximately USD 2.2 to 5.5 trillion annually - is laundered through illicit activities. In addition, recent data from the U.S. Federal Trade Commission (FTC) shows that the percentage of individuals suffering financial losses due to fraud rose from 27% in 2023 to 38% in 2024, reflecting the accelerating risks these crimes pose to the global economy.

Against this backdrop, specialized professional training has become indispensable. The global “CAMS” certification from ACAMS is recognized as the gold standard in the field of anti-money laundering. In the Arab region, The Only Solution for Training & Consulting stands out as a leading provider of tailored programs designed to strengthen the skills of professionals in this area.

What Is Money Laundering and Terrorist Financing?

According to the Saudi Central Bank, money laundering is the process by which criminals disguise illicit funds by integrating them into the financial system and concealing their origins - often linked to crimes such as drug trafficking or bribery.

In contrast, terrorist financing, as defined by the Kuwaiti Financial Intelligence Unit, involves providing funds or assets to terrorist organizations to enable their activities. For example, terrorist groups may raise money through legitimate donation campaigns or illicit activities, which are then channeled into purchasing weapons or supporting logistical operations for attacks.

Why Is Combating Money Laundering and Terrorist Financing So Important?

Money laundering and terrorist financing pose severe risks to both the economy and society. They widen economic and social inequality, increase poverty, and stifle growth. Furthermore, they facilitate the spread of other crimes -fueling corruption, drug trafficking, and terrorism itself. In short, money laundering feeds the shadow economy and undermines social values, compelling governments to strengthen regulatory oversight.

Common Challenges and Techniques Used

Financial crimes constantly evolve, adopting sophisticated methods to evade detection. Common examples include:

·        Wire transfers and shell software: Conducting transactions outside regulated institutions or layering financial movements to complicate tracing.

·         Shell companies and trade-based laundering: Creating fictitious companies or inflating invoices to disguise illicit funds, making it difficult to trace their source.

·    Cryptocurrencies and emerging technologies: Exploiting digital payment platforms and block chain-based transfers that are difficult to monitor, often used for terrorist financing.

·      Cover-ups and bribery: Funds may be disguised under personal or professional relationships—for example, between an employee and an external entity—to conceal illicit payments. Unexplained or unusual transfers should always raise red flags.

How Can Modern Technology and Artificial Intelligence Detect Suspicious Transactions?

Reports suggest that the global volume of illicit funds flowing into the financial system exceeds USD 3.1 trillion. To confront this challenge, technologies such as machine learning and artificial intelligence (AI) are playing an increasingly vital role in transaction monitoring.

For instance, HSBC Group has adopted an AI-driven AML system, enabling it to detect suspicious activities with far greater accuracy while reducing false positives by nearly 60%. In practice, this means faster identification of high-risk transactions, earlier alerts for compliance teams, and reduced time and resources wasted on low-risk cases. In the Arab region, major Gulf banks have followed suit. A regional banking report highlighted how banks in the UAE and Saudi Arabia have introduced advanced AI-powered frameworks, such as block chain analytics and biometric verification, to monitor transaction flows in real-time and detect abnormal patterns - significantly improving their ability to prevent financial crimes and terrorist financing.

How Have Global Banks Used AI to Monitor Money Laundering?

A case study from HSBC demonstrated that AI can double or even triple the efficiency of money laundering detection. AI models trained on historical transaction data were able to uncover sophisticated laundering schemes linked to criminal networks with far higher accuracy than traditional rule-based systems.

The new system identified two to four times more suspicious activities than the legacy setup, while reducing false positives by 60%. Moreover, the response time for addressing confirmed suspicious activity fell to just 8 days - dramatically increasing the chances of disrupting criminal networks at an early stage.

What Practical Measures Have Governments Taken to Strengthen AML Compliance?

How Did the UAE Strengthen Its AML Frameworks?

Following its 2022 inclusion on the FATF grey list, the United Arab Emirates enhanced its legal and supervisory frameworks. Federal Law No. 20 of 2018 required financial institutions to adopt risk-based compliance programs and appoint AML compliance officers. The UAE also reinforced the role of its Financial Intelligence Unit (FIU) to improve data sharing with banks and international agencies. Heavy fines were imposed on non-compliant institutions, while advanced technologies - such as AI transaction monitoring and block chain verification - were introduced to secure cross-border transfers. These reforms contributed to restoring international confidence and eventually enabled the UAE to exit the FATF grey list.

What Steps Has Saudi Arabia Taken to Enhance International Oversight?

Under its Vision 2030 strategy, Saudi Arabia has modernized its AML/CTF framework to align with FATF standards and U.S. regulatory practices. The Saudi Central Bank strengthened KYC requirements, mandated ongoing monitoring of high-risk accounts, and promoted widespread adoption of AI-based monitoring systems in the banking sector. These reforms not only fortified the country’s financial sector against misuse but also strengthened relationships with international correspondent banks, keeping Saudi Arabia at the forefront of regional financial integrity.

How Has Egypt Strengthened Its Banking System with Task Forces and International Cooperation?

Egypt has taken proactive measures to enhance its AML defenses. The Central Bank of Egypt formed specialized task forces to monitor high-risk transactions and expanded the use of digital KYC solutions to prevent fraud and financial abuse. On an international scale, Egypt deepened cooperation with FATF, Interpol, and U.S. authorities to exchange intelligence on financial crime networks. These steps have elevated confidence in Egypt’s banking sector, attracting more investment and improving cross-border banking relationships.

How Does Professional Training and International Certification Support AML Experts?

In today’s complex environment, professional qualifications have become essential. The globally recognized CAMS certification from ACAMS is the gold standard in AML expertise, equipping professionals with the knowledge and tools needed to detect suspicious activities.

More than 40,000 professionals worldwide have earned the CAMS credential, reflecting growing global demand for expertise in this field. Certification not only builds technical proficiency but also enhances credibility with regulators and financial institutions. At The Only Solution for Training and Consulting, accredited training programs are designed by certified experts with extensive real-world AML experience. Programs include interactive learning, case studies, and hands-on exercises, ensuring participants gain practical skills. Graduates also benefit from continuous post-training support and free consultations, enabling them to apply their knowledge effectively and contribute to their organizations’ compliance and financial transparency. In today’s world, safeguarding the financial system begins with developing human expertise - equipping individuals with the skills to detect, prevent, and disrupt money laundering and terrorist financing.