Cyber crime refers to criminal activities carried out using computers, networks, or digital technologies. In financial services, cyber crime has become a critical risk area because digital platforms, online banking, and cryptocurrency transactions have expanded the attack surface for criminals.

From phishing and ransomware to large-scale fraud, cyber crime intersects directly with money laundering and compliance obligations. According to the FCA, cyber risks are among the most pressing threats facing financial institutions. Criminals often exploit vulnerabilities in payment systems and digital identity frameworks, making cyber crime one of the fastest-evolving areas of compliance concern.

Definition of Cyber Crime in AML and RegTech

Cyber crime encompasses a wide range of digital offenses, including hacking, data theft, and the use of digital platforms for financial fraud. Within anti-money laundering (AML) and RegTech, cyber crime is not just a technology problem, it is a compliance and governance issue.

For example, fraud schemes often generate illicit funds that need to be laundered through the financial system. Similarly, cyber attacks such as ransomware create proceeds that criminals attempt to convert into cryptocurrency. This means financial institutions must apply tools like FacctShield and FacctGuard to track suspicious digital payments linked to cyber crime.

The Connection Between Cyber Crime and Money Laundering

One of the most important considerations for compliance teams is how cyber crime generates illicit proceeds.

Ransomware and Crypto Payments

Ransomware gangs demand cryptocurrency as payment, making it essential for compliance systems to monitor blockchain activity for links to cyber attacks.

Online Fraud and Account Takeover

Fraudulent online transactions often pass through legitimate banking systems. Institutions must detect these patterns using anomaly detection and Customer Risk Scoring.

Data Breaches and Identity Theft

Stolen identity data is used to create synthetic accounts that bypass traditional Know Your Customer (KYC) checks. Tools like FacctView help institutions screen and flag high-risk profiles.

Types of Cyber Crime in the Financial Sector

Cyber crime comes in many forms, each posing different risks to compliance teams and regulators.

Phishing and Social Engineering

Criminals trick customers or employees into revealing sensitive data, leading to unauthorized transactions.

Credential Stuffing

A technique where stolen usernames and passwords are tested across multiple platforms. This is a rising threat for financial institutions and will be covered in detail in its own glossary entry.

Insider Threats

Employees with access to sensitive systems may be exploited by organized crime to facilitate fraud.

Advanced Persistent Threats (APTs)

State-sponsored hackers target financial systems to disrupt services or steal data. The BIS has warned that these attacks may pose systemic risks to global financial stability.

Regulatory Response to Cyber Crime

Regulators increasingly view cyber crime as a financial stability risk, not just a technology problem.

The FATF has emphasized that cyber-enabled crime is one of the main sources of illicit funds laundered globally. In the UK, the FCA requires firms to report major cyber incidents and demonstrate resilience plans. Similarly, the EU’s Digital Operational Resilience Act (DORA) establishes clear obligations for banks, FinTech's, and service providers.

Globally, the IMF and World Bank are urging countries to align financial sector regulation with cybersecurity standards to reduce systemic risk.

RegTech and Compliance Solutions Against Cyber Crime

RegTech solutions play a vital role in detecting and preventing cyber-enabled financial crime.

Real-Time Monitoring

FacctGuard identifies unusual transaction patterns associated with cyber-enabled fraud.

Sanctions and Payment Screening

FacctShield ensures that payments linked to ransomware wallets or sanctioned hackers are blocked.

Case Management and Alert Adjudication

Alert Adjudication supports investigations by prioritizing alerts connected to cyber threats.

AI and Anomaly Detection

Machine learning helps compliance teams identify unusual behavior, such as credential stuffing or rapid account access attempts.

The Future of Cyber Crime and AML

Cyber crime will continue to evolve as financial services become more digitized. The future will likely bring:

• Greater convergence between cybersecurity and compliance teams

• Regulators demanding integrated cyber-AML frameworks

• Increased use of AI to detect anomalies at scale

• Global collaboration to track ransomware groups and crypto-enabled crime

Financial institutions that align AML and cyber resilience strategies will be better positioned to protect both compliance integrity and customer trust.