EBA ¦ SupTech can make AML and CFT supervision more effective

EU Advances in Using Technology for AML/CFT Supervision: EBA’s New Report on SupTech Tools

The European Banking Authority (EBA) has released a comprehensive report evaluating the current state and future potential of supervisory technology (SupTech) in combating money laundering and terrorist financing across the European Union. This assessment comes at a pivotal time as the EU rolls out a revamped anti-money laundering and countering the financing of terrorism (AML/CFT) framework, highlighted by the creation of the Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA). This new authority is tasked with coordinating AML/CFT supervision across member states, aiming for consistent application of rules and increased cooperation.

Early Adoption of SupTech Across Europe

While still in its early stages, the use of SupTech tools is gaining momentum among national competent authorities (NCAs). The EBA surveyed 31 authorities from 25 EU countries and identified 60 SupTech projects utilizing 13 different technologies. Nearly half (47%) of these tools are already operational, with another 38% in development. These tools predominantly focus on managing and analyzing large data sets to improve risk assessment and supervisory processes.

Benefits of SupTech in Fighting Financial Crime

The report highlights several tangible benefits from using SupTech in AML/CFT supervision. These include enhanced data quality, improved analytical capabilities, increased operational efficiency, and better identification of emerging risks. For example, authorities have developed AI-driven tools to analyze crypto transactions, automated risk assessment models using natural language processing, and systems that centralize inspection planning and remediation tracking. These technologies allow supervisors to assess risks more accurately and allocate resources more effectively.

Challenges Hindering Full SupTech Adoption

Despite promising progress, NCAs face significant barriers to fully embracing SupTech. Key challenges include limited resources, legacy IT infrastructure, legal uncertainties — especially around data protection and automated decision-making — and operational risks such as system failures or lack of transparency in AI algorithms. Furthermore, organizational resistance to change and insufficient digital literacy among staff can slow technological integration. The report also points out that collaboration between authorities remains limited, risking duplicated efforts and impeding interoperability.

Bastian Schwind-Wagner_Follow "The EBA’s latest report shows that while technology-driven AML/CFT supervision is still developing across the EU, its adoption offers clear benefits in risk detection and operational efficiency. Addressing challenges like data quality, legal clarity, and collaboration will be crucial for realizing its full potential under the new AML framework."

Strategies for Successful SupTech Integration

To overcome these obstacles, the EBA emphasizes the need for tailored strategies that align technological solutions with supervisory goals. Change management is crucial; fostering a digital-first culture and structured implementation plans help ease transitions. Robust data governance frameworks ensure high-quality data while promoting interoperability across systems facilitates cross-border cooperation. The use of synthetic data enables innovation without compromising privacy. Furthermore, establishing clear performance metrics allows continuous evaluation and improvement of SupTech tools.

The report also stresses the importance of close collaboration among IT experts, supervisors, and data protection authorities to ensure compliance with legal standards such as GDPR. Encouraging sandbox environments where supervised entities and vendors co-develop tools has proven effective in aligning technology with regulatory needs.

Looking Ahead: The Role of AMLA and EU-Wide Collaboration

The evolving AML/CFT supervisory landscape presents an opportunity to harness technology for more efficient and effective oversight. However, success depends on addressing existing hurdles through coordinated efforts. AMLA is positioned to play a central role in fostering cooperation, driving standardization, and supporting joint development projects across member states.

Ultimately, integrating SupTech into AML/CFT supervision will enhance the EU’s ability to detect and respond to financial crime risks proactively, maintaining its leadership in global financial crime prevention.

Dive deeper

• EBA ¦ SupTech can make anti-money laundering and countering the financing of terrorism supervision more effective, the EBA finds ¦ Link