The Quantexa FinCrime Pulse Report has revealed that US mid-size and community banks are exposing hidden risks and operating stronger defences.
A survey based on 200 AML professionals at US mid-size and community banks reveals a growing gap between confidence and capability in combating financial crime. The research, conducted by Quantexa, a provider of AML solutions for financial institutions, underscored the pressure of institutions to align with fraud prevention.
Globally, the United Nations Office on Drugs and Crime (UNODC) estimates that USD 800 billion to USD 2 trillion is laundered every year, with 2-5% of global GDP. While the main targets are large institutions, mid-size and community banks are facing the same regulatory expectations as the largest banks, but with fewer resources, teams, and older technology.
According to the survey, half of AML professionals affirm that reliance on outdated systems is their biggest barrier, with many citing fragmented data and the inability to monitor risks in real-time. Despite these challenges, 94% express confidence in their ability to detect emerging threats, even while 46% admit their investigations remain slow and inefficient.
The report also highlights that mid-sized and community banks can address these challenges by applying better data, contextual insights, and AI solutions, capabilities that are increasingly available to institutions of all sizes.
Key survey findings
Some findings of the survey are:
- Outdated systems and tech gaps, such as legacy technology, poor data quality, limited AI/ML adoption (47%), and lack of real-time monitoring (41%), continue to undermine AML effectiveness;
- Resource and expertise constraints as operational friction from inefficient investigations and high false positives drain scarce resources, while half (47%) of banks lack the internal expertise to modernise;
- Regulatory uncertainty slows progress, with 45% citing unclear guidance around emerging technologies such as AI.
The report outlines a five-point call-to-action urging mid-size and community banks to modernise outdated systems, adopt AI and real-time monitoring, and make optimal use of contextual data to strengthen detection capabilities. It highlights the importance of collaboration across institutions and with regulators to share intelligence and help shape expectations around emerging technologies. Finally, it addresses banks to invest in their teams and processes to build sustainable expertise, resilience, and an initiative-taking stance against financial crime.
