Two thirds of financial institutions in the European Union are at risk of missing next year’s deadline to comply with incoming anti-money laundering (AML) regulations, according to PwC Luxembourg, raising concerns around preparedness ahead of the launch of the EU’s new Anti-Money Laundering Authority (AMLA).
The warning comes as financial services firms face mounting pressure to modernise compliance operations, strengthen transaction monitoring and improve governance frameworks before the AMLA begins supervising high-risk institutions.
Industry experts have cautioned that delays in implementing more advanced financial crime controls could leave organisations exposed to increased regulatory scrutiny and operational risk.
The AMLA is expected to introduce a more centralised and harmonised supervisory framework across Europe, aimed at strengthening cooperation between national regulators and improving oversight of cross-border financial crime.
Dr Janet Bastiman, Chief Data Scientist at Napier AI, commented: “Money laundering remains a significant economic threat across Europe. Many of Europe’s largest economies suffer losses exceeding hundreds of billions per year to money laundering activity, with Germany losing over $209 billion annually, France over $130 billion and the UK almost $195 billion each year (Napier AI AML Index 2025-26).
Financial crime networks are becoming increasingly sophisticated, exploiting fragmented controls and slow, manual compliance processes. AMLA’s supervisory model will focus directly on the highest-risk financial institutions across Europe, with oversight centred on risk-based compliance and demonstrating how firms are actively managing financial crime exposure.
This reflects a broader regulatory shift already emerging at domestic level, particularly in markets such as France, where regulators are increasingly signalling that AI-driven monitoring is necessary alongside traditional rules-based systems. As transaction volumes continue to grow and criminal typologies evolve, organisations need technologies capable of monitoring activity in real time, identifying suspicious behaviour and providing transparent, explainable audit trails that compliance teams and regulators can trust.”
The regulatory shift reflects growing recognition that rules-based monitoring systems are no longer sufficient to tackle increasingly sophisticated financial crime networks. Regulators across Europe are placing greater emphasis on risk-based compliance approaches capable of identifying suspicious activity in real time, improving transparency and demonstrating effective oversight of evolving financial crime typologies.
Dr Janet Bastiman continued: “Greater regulatory alignment across Europe has the potential to significantly strengthen AML outcomes, particularly for higher-risk institutions operating across multiple jurisdictions.
Countries such as France and Germany, which continue to face some of the largest economic losses linked to financial crime, stand to benefit significantly from AMLA’s collaborative and supervisory approach. AMLA’s supervisory model embeds risk-based compliance directly into its functions, requiring firms to demonstrate how they are actively managing financial crime risk in practice, something that increasingly necessitates the use of AI-driven monitoring and detection capabilities.
However, regulation alone is not enough. Effective compliance depends on firms strengthening internal controls, improving data quality and adopting more proactive monitoring approaches to reduce the financial, operational and reputational damage caused by money laundering.”
As criminal methodologies become increasingly complex and cross-border in nature, organisations are under continuously mounting pressure to improve data quality, operational resilience and monitoring capabilities in order to meet evolving regulatory expectations and reduce exposure to financial, operational and reputational damage linked to money laundering activity.
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