15 Informative Money Laundering Statistics in 2021

Money laundering is the act of making money acquired through illegal means look like they were generated through legitimate means. 

 

Hiding the identity and source of illegally acquired money is considered fraudulent activity. This illegal money includes money obtained through illicit activities like drug trafficking, terrorism, fraud, and other criminal actions. 

 

Money laundering has remained a problem for organizations and countries across the world. When successful, the funds are used to promote other criminal activities. 

 

This is why Anti-Money Laundering regulations and policies are provided for financial institutions and other organizations to adhere to. 

 

But, how effective have these regulations been? How well are organizations maintaining compliance and preventing money laundering practices? The best way to find out is to examine the latest statistics on money laundering.

 

Money laundering practices have evolved over the years, but some of these statistics remain relevant even today. 

 

Here, we will examine 15 enlightening statistics on money laundering from previous years up until the present to give you a clear insight into past money laundering practices and what it’s like today.

 

Let's get into it.

 

15 money laundering statistics you need to know in 2021

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Deep knowledge of money laundering statistics can help you evaluate money laundering practices, allowing you to strictly comply with the anti-money laundering regulations by taking necessary measures. Let's check them out below:

 

1. The anti-money laundering software is expected to amass a $1.77 billion profit by 2023

 

Money laundering software is constantly on the rise. As of 2016 and 2017, the market value of anti-money laundering software was about $690 million. However, its market value is projected to be $1.77 billion by 2023.

 

 

2. 12 out of the 50 largest financial companies were fined for AML violations in 2019

 

With 12 out of 50 largest companies suffering from AML violation fines, this is proof that all companies are subject to AML compliance, regardless of their size. 

 

Therefore, it is important that all organizations stay in compliance with AML policies through the use of effective AML compliance software and strict monitoring of their staff conduct and activities. 

 

Without deliberate actions to maintain compliance, companies can be flagged for money laundering practices, regardless of how large or profitable an organization is.  

 

 

3. Banks hit nearly $10 billion fines in 2019 for going against Anti-money laundering practices 

 

As financial institutions, banks are often the most affected by money laundering practices, suffering up to $10billion in losses. 

 

For this reason, it is critical for banks to strictly monitor their clients' accounts to flag any form of suspicious financial activity. They can do this through the use of Anti-Money Laundering compliance software and providing consistent training on AML compliance regulations for their staff.

 

 

4. Financial institutions in the U.K. facilitated over $459 billion in illegal funds in 2019.

 

The growth of money laundering practices in the U.K. is constantly on the rise. Although financial institutions are constantly working towards mitigating these criminal practices, it is inevitable that financial fraudsters still count on financial institutions for their money laundering practices. 

 

This is why financial institutions in the U.K. and beyond should continually take adequate measures to track their customers' financial activities to ensure they do not promote financial crimes. 

 

One of the best ways to do this is to use Anti-Money Laundering software to effectively monitor their customers' accounts and transactions.

 

 

5. 91.1% of money laundering offenders were imprisoned in 2019

 

In 2019, the United States Sentencing Commission revealed that 91.1% of those convicted of money laundering practices were sentenced to about 70 months of imprisonment. 

 

 

6. Only 0.1% of illegally acquired funds are recovered from financial criminals 

 

According to a 2018 study by Ronald F. Pol from La Trobe University in Melbourne, Australia, only 0.1% of money-laundered funds are regained from money launderers.

 

This gives money launderers access to use illegal funds for other criminal activities. To prevent this, financial institutions and organizations are expected to be in compliance with anti-money laundering regulations for adequate protection against money laundering activities.

 

 By doing this, they can ensure they do not lose their money to money laundering activities.

 

 

7. The estimated value of money laundering activities is about 2% to 5% of the world's GDP 

 

In the 1980s, The United Nations revealed that money laundering practices cost the world around 2% to 5% of GDP, which is estimated at about $800 billion to $2 trillion in current US dollars. 

 

 

8. 30% of money mules in the U.K. are below 21 years old 

 

Money mules are fraudsters who transfer illicitly acquired money on behalf of someone else. In the U.K., anti-money laundering bodies have proven that convicted money mules who are below 21 years old.

 

 

9. Anti-money laundering agencies reprimanded 2,300 money mules in 2020

 

U.S. money laundering data reveals that 2,300 money mules were vindicated in 2020. When these statistics are compared to money laundering statistics in 2021, it was discovered that the number was three times the number of the convicted money mules in 2020. 

 

 

10. 90% of laundered money in 2020 were not discovered 

 

The United Nations revealed that about $2 trillion of money is laundered every year; however, 90% of this laundered money goes undiscovered.

 

 

11. Financial service firms spend at least $14.3 million on AML compliance every year 

 

According to a LexisNexis study, financial institutions make a high investment (up to $14.3million) in AML compliance to prevent money laundering practices and avoid the penalties and fines non-compliance attracts. 

 

 

12. Mexico experienced an estimated amount of $50 billion laundered money in 2019 

 

Mexico is considered one of the countries with a high influx of money laundering practices. Illegal organizations and financial fraudsters laundered about $50 billion in Mexico in 2019.

 

 

13. 400 times more money are laundered in banknotes than cryptocurrencies 

 

Bitcoin is only about $2.5 billion of money laundered since 2009. This shows that a large percentage of money is laundered in Fiat currencies and not cryptocurrencies. 

 

 

14.  95% of system generated alerts on money laundering practices are false positives 

 

Many financial institutions incorporate system-generated software to identify money laundering practices. However, 95% of these systems generated money laundering alerts resulting in false positive transaction monitoring alerts. This is why efficient system-generated alerts like anti-money laundering software are recommended to help institutions identify actual money laundering practices. 

 

 

15. There was a 13% decrease in 2019 money laundering statistics compared to 2018 money laundering statistics 

 

There was a noticeable decrease in 2019 money laundering practices when compared to money laundering activities in 2018. For example, only about 990 cases were money laundering cases out of the 76,538 cases announced by the U.S. Sentencing Commission. 

 

 

How AML compliance software prevents money laundering 

 

An efficient Anti-Money Laundering (AML) software is the most effective way for financial institutions and other organizations to combat money laundering practices and stay in compliance with anti-money laundering policies.

 

Below are the different ways AML compliance software can prevent money laundering practices. 

 

1. It helps with customer transaction monitoring 

 

The best way for financial institutions to identify money laundering activities is to strictly monitor their customers' transactions. 

 

However, this cannot be done manually or with generic system-generated alerts but through efficient AML software. 

 

It monitors your consumers' transactions and accounts to ensure they comply with Anti-Money Laundering and Counter Financing of Terrorism regulations. 

 

It also tracks suspicious transfers and monitors transactions with Fiat or cryptocurrencies. By doing this, you are well informed on any suspicious financial activity early, so you can take adequate steps to prevent such accounts in your organization. 

 

 

2. It is more efficient 

 

Financial activities are more digital than manual. Many people perform financial activities online, and the increase in online payments compared to cash payments means organizations need to introduce AML software to monitor and regulate transactions as manual monitoring procedures won't suffice. 

 

This makes evaluation and monitoring processes more efficient because they are less time-consuming and error-prone.

 

AML software helps financial institutions scan various transactions within a minimal time frame, which makes processes faster.

 

It also ensures that suspicious financial activities identified are noticed quickly, so organizations can report them to Anti-Money Laundering agencies immediately before they impact the company.

 

 

3. It reduces the number of false positives 

 

AML software helps to reduce the rate of false positive transaction monitoring alarms to really track and identify suspicious financial transactions.

 

You can view all the transactions relating to anti-money laundering and Know Your Customer (KYC) policies to see if your consumers are in compliance with AML policies and are not blacklisted by financial crime regulatory bodies. 

 

You can track money transfers through the financial monitoring system, which gives you accurate and timely reports on suspicious customer transactions. 

 

4. It provides centralized management for optimal results 

 

AML software provides a holistic view of all your customer transactions from one single place. 

 

This gives you a 360-degree view of your customers' risks which helps to streamline your processes, and allows you to evaluate and collaborate better with your clients to make faster decisions. 

 

You can also work on different cases with your team from one centralized place, which helps you work faster, identify and work on customers' transactions to combat money laundering activities more collaboratively.

 

Conclusion 

 

Money laundering practices are highly prominent in several countries in the world, leaving individuals, businesses, and financial institutions at risk of fraud, negative reputation, and penalties associated with non-compliance. 

 

In this article, we discussed fifteen informative statistics to keep you updated on the latest trends on money laundering activities in 2021.