FATF ¦ FATF Releases New Paper on Cyber-Enabled Fraud

Cyber‑Enabled Fraud – Digitalisation and AML/CFT/CPF Risks

The escalating scale and sophistication of cyber‑enabled fraud pose a systemic threat to financial integrity and public trust. The FATF’s February 2026 paper highlights how rapid digitalisation, including instant payments, virtual assets and AI‑enabled social engineering, has expanded opportunities for fraudsters to generate and launder large volumes of illicit proceeds. Fraud is now recognised as a major money‑laundering risk by 90% of assessed jurisdictions, with losses reaching into the tens of billions annually in some countries and victimisation rates impacting sizable shares of adult populations. The speed and cross‑border nature of modern fraud schemes challenge traditional detection, investigation and asset‑recovery approaches, especially where criminals exploit jurisdictional gaps and convert proceeds into virtual assets or route them through nominee accounts and money mule networks.

Enablers and methods driving this growth include the proliferation of digital platforms and messaging channels, the widespread adoption of instant and cross‑border payment rails, and the emergence of sophisticated tools such as deepfakes and automated phishing campaigns. Professionalised criminal networks often operate through dedicated scam centres and integrate laundering mechanisms from the outset, blurring the distinction between fraud and organised financial crime. These trends are compounded by weaknesses in information sharing, slow international cooperation, and inconsistent implementation of AML/CFT standards for virtual assets and beneficial ownership transparency. The FATF emphasises that timely, coordinated public–private and cross‑border responses are essential to limit criminals’ ability to move funds before interception.

Bastian Schwind-Wagner _Follow

"Cyber‑enabled fraud exploits the speed and anonymity of modern payment systems and virtual assets, making early detection and cross‑border cooperation essential to prevent rapid dissipation of illicit proceeds. Strengthening payment transparency, regulatory oversight of virtual assets and beneficial ownership disclosure will materially reduce criminals’ ability to hide and move funds.

Public–private partnerships, PPPs, and investment in analytics are critical to scale effective responses; machine learning and real‑time risk scoring can flag suspicious flows before funds are irreversibly converted or dispersed. International coordination on asset recovery and information sharing will determine whether authorities can disrupt organised fraud networks and compensate victims."

Leveraging FATF Standards to Respond

The FATF has taken a multi‑pronged approach to reduce the harms from cyber‑enabled fraud by reinforcing standards and practical tools that improve traceability, disruption and recovery of illicit proceeds. Payment‑transparency initiatives, including confirmation‑of‑payee mechanisms and improved data requirements for payment messages, aim to make fund flows more traceable and reduce anonymous transfers. Revisions to asset‑recovery standards promote rapid payment suspension, freezing powers and non‑conviction‑based confiscation regimes, while stronger international cooperation mechanisms seek faster informal coordination and evidence exchange to support cross‑border investigations and asset recovery.

Regulation of virtual assets and VASPs remains a priority because virtual assets can facilitate rapid conversion and flight of fraud proceeds. Since introducing global standards for virtual assets in 2019, the FATF has monitored jurisdictions’ implementation and pressed for consistent adoption of customer identification and transaction‑tracing requirements. The FATF also continues to push for improved beneficial ownership transparency to counter the use of shell companies by professionalised fraud actors. At the national level, many countries are building domestic anti‑fraud coordination centres that mirror AML coordination frameworks, enabling faster information sharing among law enforcement, regulators, FIUs and private sector partners.

Technology and partnerships as force multipliers

Given the volume and velocity of fraudulent transactions, manual methods alone cannot keep pace. Financial institutions and FIUs are increasingly adopting advanced analytics and machine learning to detect anomalies, score payment risk in real time and flag suspected fraud patterns. These technological tools, combined with robust public–private partnerships and international cooperation, enable earlier detection and intervention. The FATF advocates for scaling these capabilities alongside legal and operational reforms, so that AML/CFT frameworks can operate effectively in real time and across borders.

Conclusion

Cyber‑enabled fraud is embedded in the fabric of the global financial system and requires sustained, coordinated responses across jurisdictions and sectors. The FATF’s continued focus – strengthening payment transparency, regulating virtual assets, improving asset recovery and promoting beneficial ownership disclosure – creates a comprehensive toolkit for governments and private actors to disrupt criminal profit streams and recover victim losses. Success will depend on accelerating global compliance with these standards, enhancing real‑time information sharing, and investing in analytic and technological capabilities that can outpace increasingly sophisticated criminal methods.

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• FATF ¦ FATF releases new paper on cyber-enabled fraud ¦ Link