Dunne: Digitalisation fuels financial crime, demands vigilance
Patricia Dunne, Director of Horizontal Supervision at the Central Bank of Ireland (CBI), highlighted the increasing risks from financial crime, driven by technological transformation and global instability. Speaking at the European Anti-Financial Crime Summit in Dublin, Dunne outlined the CBI's comprehensive approach to prevention.
Instability fuels criminal innovation
Director Patricia Dunne emphasized a world of 'extraordinary change, climate transition, geopolitical tensions, rapid technological transformation and shifting economic conditions' that amplifies financial crime risks.
A World Economic Forum paper notes these global economic shifts create opportunities for criminals, while emerging technologies accelerate crime, as Europol observes, expanding the speed, scale, and sophistication of organised crime.
The CBI addresses this through its annual Regulatory and Supervisory Outlook Report, structured around three core themes.
These include 'Macroeconomic and Geopolitical Drivers,' focusing on rapid digitalisation's dual impact of consumer benefits and increased fraud, and 'Longer-Term Structural Forces,' which categorises financial crime risks as 'significant to severe.'
The CBI's approach is to assess the nature, degree, and speed of change, demanding resilience, adaptability, and trustworthiness from firms in managing these evolving risks for their customers and the wider financial system.
Targeting dirty money and digital scams
The CBI regulates to identify and mitigate risks from money laundering, terrorist financing, financial sanctions evasion, fraud, and market abuse, aiming to safeguard financial system integrity.
Director Dunne highlighted the corrosive impact of financial crime, damaging trust and the financial system's 'plumbing.'
High-risk sectors like banking, payments, e-money, and investment funds remain a priority for ML/TF supervision.
While banking AML/CFT frameworks are generally mature, they must adapt to new digital business models.
The payment and e-money sector requires deeper work on governance and controls, particularly from newer, emerging firms.
For fraud, Ireland recorded €160 million in total payment fraud in 2024, with €66 million in losses.
New CBI research found over one in three people surveyed experienced fraud, with almost two-thirds losing money.
The CBI's new Consumer Protection Code includes explicit requirements for firms to protect consumers against fraud and support victims, alongside ongoing awareness campaigns and efforts to remove criminal content online.
A relentless, collective battle
Dunne's remarks underscore the relentless and evolving nature of financial crime, driven by technological advancements and global instability.
The Central Bank of Ireland's comprehensive approach, from supervision to consumer protection, highlights the systemic challenge this poses.
Ultimately, effective prevention demands continuous vigilance and coordinated action across all stakeholders, from regulators to individual firms and technology providers.