Technology Enabled Financial Crime Prevention and Navigating the New Frontier of Digital Assets and Stablecoins

The 7th Annual AML/Fincrime Tech Forum 2025 recently took place in London, hosted by FinTech Global and RegTech Analyst, where George Kellogg represented JTC on a panel titled “Stablecoins and Digital Assets – Navigating the New Frontier of Financial Crime“

The event brought together private industry leaders, leading fintech vendors, alongside pivotal government representatives from HMRC and the National Crime Agency at an event capturing the pulse of innovation and challenge across the evolving landscape of financial crime and compliance.

The Data Imperative: From Technical Compliance to Strategic Architecture

A recurring theme throughout the conference was the transformational role of data. “Data” featured in every session, repeatedly underscoring that AML compliance is no longer the sole domain of regulatory specialists, it now demands system architects and data management experts.

Financial institutions are shifting toward integrated, end-to-end lifecycle management, embracing robust data practices across onboarding, risk profiling, transaction monitoring and periodic reviews. System silos, historically dividing departments or technology stacks, are gradually dissolving and supporting unified GRC ecosystems and sharper, more proactive crime prevention.

It was especially noted that technology solutions are increasingly becoming a routine part of compliance work. Their adoption should be governed by a strong understanding of the mechanisms behind each solution and robust governance frameworks need to be in place before any deployment.

Institutions should aim for tech solutions that support forward-looking analysis, using data not only for retrospective reviews, but also to anticipate and prevent future financial crime through early warning signals and trend analysis.

Closing the Loops: Collaboration that Counts

The fight against financial crime needs to become more collaborative, with improved communication channels both within and beyond the walls of individual firms:

• Government-to-Government: There’s anticipation around the European Union (EU)’s Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) fostering greater country-to-country intelligence sharing.
• Business-to-Business: While collectives like UK Finance offer a useful forum, panelists stressed the need for deeper industry coordination, especially to prevent criminals exploiting regulatory gaps or fragmentation.
• Government-to-Business: Calls continue for governments and regulators to provide more substantive feedback on Suspicious Activity Reports (SARs), arming compliance officers with intelligence to continually refine controls and customer risk assessments.

The Reality of AI: Enablement, Not Replacement

Artificial intelligence occupied much discussion, but the consensus was clear: AI is poised to empower, not replace, AML leaders and skilled specialists. Adoption of such technology will likely shift or broaden the skillsets required for compliance and risk professionals, who must be equipped to understand and explain how technology is used within their compliance frameworks.

While generative AI shows promise in workflow automation and enhanced analytics agentic AI, the kind capable of fully autonomous decision-making, is not yet a practical reality. For successful adoption of AI tools and models, several key considerations were raised:

• Compliance and MLRO teams must be able to explain and justify the use of each model to regulators;
• models should be adaptable and subject to ongoing validation;
• data used for model training must be sufficient and of high quality; and
• model operations must be transparent to satisfy oversight and audit requirements.

One concern flagged was the potential erosion of training opportunities for junior compliance professionals due to automation, highlighting the need for thoughtful implementation that supports career development as well as operational efficiency.

My Panel Spotlight: Stablecoins and Digital Assets – Risks and Responses

The panel George joined zeroed in on one of the industry’s fastest-evolving topics: how the rise of stablecoins and digital assets is reshaping both opportunity and risk in compliance.

Regulatory Evolution:

Across the UK, Europe and North America, regulators are rapidly adapting, building frameworks that combine innovation with robust market integrity. In the UK specifically, the FCA is preparing to regulate fiat-backed stablecoins used for payments, with an emphasis on consumer protection, asset backing, custody and redemption rights. Importantly, regulatory intent is not to dampen innovation, but to build the trust required for digital assets to become a lasting part of the payments ecosystem.

Europe is moving forward with the MiCA framework, but quickly supplementing it with PSD3, which will apply tighter consumer protection measures and stricter AML requirements, even for crypto-native firms and DeFi platforms. Institutions need to prepare for broader oversight and faster regulatory cycles than ever before.

Financial Crime Landscape:

The inherent speed and reduced barriers to transfer offered by stablecoins and digital assets appeal to legitimate businesses and criminals alike. While blockchain enables transaction transparency, criminals exploit mixers, unregulated swapping services and vast networks of anonymous wallets to evade detection.

The biggest red flags include the use of privacy-enhancing platforms, automated DeFi swaps, and inadequate KYC checks by unregulated exchanges.

According to recent estimates, crypto crime is rising sharply, with the FBI reporting American losses reaching $9.3 billion in 2024, a 67% annual increase. *(Source: AML Intelligence, Europol, FBI)

Adapting Compliance Programs:

Traditional finance’s risk management fundamentals are still essential, but they must now be supported by blockchain analytics, enhanced customer due diligence (especially for unlisted or unregulated entities) and lifecycle management tools that track both source of funds and source of wealth on-chain.

Transaction monitoring vendors are increasingly vital in surfacing patterns of suspicious activity, but these must be considered as part of a holistic GRC ecosystem, feeding into real-time KPIs, risk indicators and regulatory reporting.

For any institution engaging with digital assets, robust onboarding, due diligence and continuous monitoring, underpinned by “trust rails” and AML/CTF controls, are non-negotiable.

As financial crime risks evolve, integration of technology and AI must be accompanied by strong governance, transparent model validation and careful selection of data sources to support regulatory engagement and future risk prediction.

Emerging Threats and Controls: 

Criminals target weak links: ecosystem fragmentation, unregulated platforms and gaps between regulatory regimes. Cross-jurisdictional frameworks and coordinated industry efforts, mirroring the approach being proposed by the FCA and the upcoming PSD3, are critical to ensure that innovation is not exploited by illicit actors.

Concluding Thoughts

The event left no doubt that the era of digital assets and stablecoins is here, and with it, the demand for evolved, data-driven and collaborative AML leadership.

Institutions that invest in integrated tech, communicate across silos and prepare for both current and next-generation risks will be best positioned to navigate what’s next.

At JTC, we’re committed to responsible innovation combining expert insight, cutting-edge technology and regulatory diligence to help our clients flourish in this rapidly changing environment.