AI could stop $15bn of dirty money passing through the Nordics | Napier AI

AI is on everyone’s lips, and there are more and more financial institutions looking to adopt greater automation to ease the financial crime compliance operation. However, many compliance professionals cite a lack of guidance from the regulator as a reason why AI implementations can seem like a hefty task. While some markets have clearer guidance than others on the best practices for AI usage, we are starting to see some good guardrails which are driving AI adoption. Financial institutions are also grappling with increasing regulations around financial crime compliance – finding a balance between meeting the needs of the regulator while also innovating is a tough balance to achieve.  

Implementing AI in financial crime compliance without having the right strategy can lead to not only billions of dollars in fines, but even more in reputational loss.  Financial institutions should be aware of the regulatory environment they operate in, and understand the risks and opportunities of AI that come with it. The Napier AI / AML Index 2024-2025 found that global economies could save $3.13 trillion annually using AI to detect and prevent money laundering and terrorist financing. 

In this article, we will examine the impact of AI on anti-money laundering (AML) strategies, and look at how much money could be prevented from passing through the Nordics region illegally, with data from the Napier AI / AML Index.   

The Nordic markets have a low amount of GDP lost to money laundering, with a low cost of financial crime compliance. This can be attributed to its leadership in AI and technology. In June 2024, Microsoft announced it would be investing US $3.2 billion in cloud and AI infrastructure in Sweden over the next few years.

All of the individual countries within the Nordic block (excluding Iceland and Norway) are part of the European Union (EU), and so are accountable to the EU AI Act, which proposes AI principals of human-centricity and transparency. This includes Sweden, Denmark and Finland. The combined GDP of these nations constitutes one of the biggest economies in the world, making it an attractive target for financial criminals. Although Iceland and Norway are not EU member states, they hold similar stances to their neighbours on financial crime compliance.

Since 2018, financial institutions (FIs) in the region have been making a concerted effort to improve AML controls. The goal is to achieve geographical and economic scale by establishing a position as a low-risk partner in the financial ecosystem. The Nordic nations are well on their way to achieving this. The Digital Operational Resilience Act (DORA), is an EU regulation aiming to strengthen IT security of financial entities and insurance companies, that came into force from January 2025. Collective intelligence across the network will set the tone for a culture of transparency in the financial services sector across the Nordics.

The Nordics’ collaborative cross-border payments initiative, P27, was to be formed through a collaboration between the six largest banks and was set to have AML as part of a centralised solution. Although P27 was withdrawn in 2023 an understanding of the national and institutional differences. Many financial institutions, each with their own risk profile operate throughout different markets in the region. It is important to consider that each market has differing regulatory guidance, necessitating a multi-configuration approach to financial crime compliance for a holistic view of risk.

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Photo by Einar Storsul on Unsplash