A significant number of Australian financial institutions anticipate a rise in financial crime risks in 2025, according to Kroll’s 2025 Financial Crime Report. However, many businesses are struggling with inadequate compliance programmes to effectively address these mounting threats.
The report reveals that 64% of Australian firms expect the risks associated with financial crime to escalate in the coming year. Despite these concerns, only 16% of organizations believe their compliance programmes are “very effective.”
A key challenge identified is the lack of advanced technology and sufficient investment. Just 28% of respondents expressed strong confidence that their financial crime compliance programmes are well-equipped to tackle emerging risks.
Governance remains another critical issue. Only 20% of companies are confident in their organization’s ability to manage and oversee financial crime risks through a robust governance framework.
In terms of preparedness, just over a third of institutions feel their compliance programmes are “very prepared” to handle geopolitical risks, including those stemming from an ever-changing sanctions landscape. Less than 40% of respondents express confidence in their programmes’ ability to manage sanctions screening effectively.
The report also highlights that emerging risks, such as the growing use of artificial intelligence by criminals (80%) and increasing cybersecurity threats (60%), are top concerns for 2025. Other identified risk factors include a rise in predicate crimes (60%), financial strain on individuals (40%), political instability (28%), and broader geopolitical uncertainties (20%).
Cryptocurrency-related risks remain prominent. Over half of respondents (52%) view financial crimes tied to digital assets as a significant or moderate threat. Yet, only 28% of compliance programmes currently account for cryptocurrency-related risks, with another 24% planning to do so in the future.
The assessment of supply chain threats also poses a challenge. Only 36% of respondents are highly confident in their programmes’ ability to evaluate such risks. The most significant risks within this area are cybersecurity (56%) and political instability (28%). Despite this, 40% of respondents believe their compliance programmes are well-prepared to handle these issues in 2025.
As financial crime risks continue to evolve, the report underscores the pressing need for greater investment in technology, governance, and training to ensure that compliance programmes can meet the challenges of the year ahead.
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