Working together to ensure financial integrity

Speech by Cecilia Skingsley, Head of the BIS Innovation Hub, at the at the BIS Innovation Hub's 2025 Analytics Showcase, London, 27 March 2025.

Good morning. It is a great pleasure to be here today and to welcome you to the BIS Innovation Hub's Analytics Showcase.¹

This event marks the conclusion of the 2025 Analytics Challenge, in which we invited innovators to submit proposals for collaborative technology solutions to a specific problem.

Over the next two days, we will come together to tackle a pressing challenge for regulators, businesses and consumers - financial crime. And since financial crime does not respect borders, we believe there is a clear need for deeper global collaboration. In the next few minutes, I will reflect on why this is essential and how we can work together in an increasingly digitalised world.

The BIS Innovation Hub already helps central banks around the world collaborate on financial technology. We track key trends, connect innovation experts to each other and develop public goods in the technology space that are geared towards improving the functioning of the financial system.

We experiment through projects that aim to show how technology can help and inspire meaningful action. These projects are possible thanks to collaboration with the global community of policymakers and innovators. And to our delight, part of this community is also here today.

In my remarks, I will share with you the Innovation Hub's projects that use technological innovation to safeguard financial integrity. And then I will set out our plan for the next two days to explore new technology and further expand global collaboration in the fight against financial crime.

But let me now turn to why action is called for in the first place.

Financial crime today

Financial services are needed for a society to work well. Indeed, they are crucial for the economy to function properly. But widespread financial crime, such as fraud, money laundering and cyber attacks, undermines the integrity of our financial system and harms society. Central banks and financial supervisors therefore have a strong interest in supporting the fight against this type of criminal activity.

The scale of financial crime is staggering. By some estimates, over $3 trillion² in illicit funds move through the financial system each year, draining up to 5% of global GDP.³ Fraud alone costs hundreds of billions of dollars, hitting both consumers and businesses that have to shoulder a considerable share of the losses.

We have good reasons to believe that most cases of fraud are never reported, which leaves the true scale hidden.⁴ And the real cost isn't just money – financial crime often goes hand-in-hand with  other crimes, such drug and human trafficking, often damaging society's most vulnerable people.

Meanwhile, criminals move faster than law enforcement, exploiting technology and global networks to stay ahead. Look no further than Europe for evidence. Most fraud here appears to be cyber-enabled, online scams that very often cross borders,[5] with more consumers being targeted than ever before.

In turn, financial firms face soaring compliance costs to detect illicit activity, spending hundreds of billions each year just to keep up.⁶

And despite these efforts, estimates indicate that less than 1% of dirty money is intercepted and recovered,⁷ a remarkable statistic that highlights a difficult reality: despite growing investment in fighting financial crime, the overall results are falling short.

To turn the tide, we need to explore new ways to fight financial crime, and we know that new technology holds great potential.

But we also know that only through the collaboration, support and contributions of many can we fully harness technological innovation to protect our financial system and society. In other words, it takes a village.

That brings us to today. We've laid the foundation already – the next two days of the Analytics Showcase will build on it.

Let me share how the BIS Innovation Hub has been driving this effort.

The role of the BIS Innovation Hub

The Bank for International Settlements supports central banks in their pursuit of monetary and financial stability by fostering international cooperation.

About five years ago, the BIS launched the Innovation Hub – a partnership with central banks that now spans seven centres across the globe, with one located here in London and hosted by the Bank of England.

The Innovation Hub experiments with new technologies to see how they can solve shared challenges and help central banks deliver on their mandates more effectively.

It does so because technology is changing finance fast, and the Innovation Hub aspires to facilitate collaboration and be a partner to central banks, while demonstrating the potential that novel technology brings.

And the financial system needs to be secure, resilient and trusted, no matter how fast things change.

Financial integrity is key to central banks for three reasons.

First, threats to financial integrity are also threats to safety and stability - their core job.

Second, central banks operate and supervise financial market infrastructures such as payment and settlement systems, where the threat of financial crime exists.

Third, central banks often oversee banks' compliance with anti-money laundering rules that enable the detection of illicit transactions.

Some of the Innovation Hub's projects have developed technological solutions or components that could be combined in a potential "technology stack", elevating global collaboration in the fight against financial crime.

Let me unpack that.

A technology stack to maintain financial system integrity

Consider a typical cross-border payment – it involves multiple banks and payment systems across jurisdictions. From the moment the sender makes a payment until the final recipient receives the money, multiple steps are taken to keep the payment safe and secure.

I will walk you through the five key components that make these steps more effective.

To start, each bank involved in the transaction must conduct compliance checks. This involves screening customers against sanctions lists or ensuring compliance with foreign exchange rules. These checks are often repeated and require manual work, due to varying regulations and data standards along the payments chain.

Our first component of the technology stack provides a solution for programmable compliance and transaction pre-validation.

Through Project Mandala, we have demonstrated better options for financial institutions to automate compliance checks and generate cryptographic proofs to show they have conducted all the necessary checks before initiating a transaction.

The solution enhances the efficiency, transparency and speed of cross-border transactions without compromising the quality and soundness of regulatory checks.

Mandala also improves transparency on country-specific policies, while facilitating real-time reporting and monitoring for regulators and supervisors.

Now, after compliance checks, transactions are submitted to electronic payment systems for processing. These systems have a bird's eye view of payers and payees allowing them to analyse transaction networks.

Our next component is about embedding enhanced transaction analytics into payment systems. This could improve detection of seemingly legitimate transactions tied to complex money laundering schemes.

Ongoing work in Project Hertha aims to show that advanced artificial intelligence (AI) and network analytics methods at a payment system level can help identify financial crime patterns that warrant a second look, while protecting privacy by using only a limited set of data points.

To achieve this, the project created synthetic transaction data mimicking real payments using state-of-the-art AI methods. These data were also shared with Analytics Challenge participants to help test their solutions.

The third component is about collaborative analytics. Advanced technologies, such as federated learning and multi-party computation, allow public and private stakeholders to share intelligence without revealing private customer data. Such public-private collaboration can help stakeholders join forces to identify criminal activity. 

Project Aurora demonstrated how shifting to this more holistic approach, including the application of AI and machine learning techniques, helps identify money laundering and financial crime networks both nationally and internationally.

Another component of our tech stack is user privacy, which is crucial in all our projects. Privacy rights must be upheld in any collaborative analytics and information sharing initiatives.

Projects Aurora and Mandala tested privacy-enhancing technologies for secure data sharing. Project Hertha is testing methods to identify suspicious network patterns using a minimal set of data points.

The final component is protection against cyber threats, vital in today's digital landscape. Fraudsters and cyber criminals often use similar methods, like phishing. And those same technologies can also be used to fight back against the criminals. 

Two of our projects addressed this.

Project Raven can help the financial sector and authorities assess cyber security and resilience in their jurisdiction, by using AI to lower the reporting and analytical costs.

Project Polaris focuses on the cyber security and resilience of potential future forms of money and payment systems, including offline digital payments.

Strengthening these five components can help future-proof the financial system against evolving threats.

Let me now explain how the Analytics Challenge and Showcase play a role here.

Looking ahead: the Challenge and the Showcase

Late last year, we invited public and private sector experts to join the BIS Innovation Hub 2025 Analytics Challenge and build on the work we started.

We asked innovators to propose collaborative tech solutions that combat financial crime and simplify compliance through two challenges.

In the open challenge, participants had to tackle three key questions:

• How can AI be used to improve the detection of illicit financial activity?
• How can privacy-preserving technology be used in sharing data and intelligence?
• Finally, how can we collaborate on innovative tech solutions to enable compliance with diverse regulations across jurisdictions?

In the prediction challenge, participants were asked to build algorithms to detect illicit transactions.

Participants could test and demonstrate their solutions using a rich and realistic synthetic payments data set developed in Project Hertha.

I am impressed with the high quality of the responses and I hope the demonstrations and discussions at the Analytics Showcase inspire new possibilities and partnerships.

But the Showcase has even more to offer in the next two days.

And with that, I trust the Analytics Showcase will strengthen our fight against financial crime and look forward to the insights ahead.

Thank you very much for listening.

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¹ My thanks go to the BIS Innovation Hub's Andrei Pustelnikov and Simina Puscasu who helped me write this speech.

² Nasdaq Verafin, Global Financial Crime Report, 2024.

³ United Nations Office on Drugs and Crime, "Money laundering".

⁴ UK National Crime Agency (NCA), "Fraud".

⁵ The Association of Certified Anti-Money Laundering Specialists (ACAMS), "Cyber-enabled fraud and illicit money flows", infographic, 2024.

⁶ LexisNexis Risk Solutions, Report: The true cost of financial crime compliance, 2023.

⁷ United Nations Office on Drugs and Crime, "Factsheet: money laundering", 2014.