Depending on which estimate you choose, the cost of financial crime globally is anywhere between €1.2 trillion and €3 trillion every year and rising. And that’s before the incalculable cost of the associated human misery is factored in.
“Up until recently I think when people heard about financial crime, they often thought of offshore scandals in sunny tax havens or international crime syndicates far from everyday life,” says Deloitte Ireland financial crime leader Colm O’Flaherty. “Today, every person with a mobile phone in Ireland has received a fraudulent email, text or phone call. Financial crime is closer than we think, embedded within every aspect of Ireland’s economy.”
Financial crime is any illegal activity involving money or finances, such as stealing money, tricking someone out of money or hiding illegally gained money to make it look legitimate, he adds. This can range from sophisticated money laundering, terrorist financing and tax evasion to simpler but equally harmful scams targeting Irish businesses and individuals.
“In my role as financial crime leader at Deloitte Ireland, I see daily how financial crime, like invoice fraud against Irish SMEs or phishing attacks targeting elderly citizens in rural communities, erodes trust and stability in society,” says O’Flaherty.
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“The real danger is that these crimes are often seen as an annoyance, a statistic or victimless, leaving their cumulative damage unnoticed until it’s too late. They steal from vulnerable people, drain resources that could otherwise be invested in R&D, jobs or infrastructure, taking money away that could be used to support essential public services like hospitals and schools, directly impacting each of us.”
Financial crime thrives because it’s incredibly profitable and surprisingly low risk for perpetrators, O’Flaherty explains. “Globalisation and Ireland’s open economy, while great for trade, have also opened doors to criminals who exploit cross-border financial flows. The rapid digitalisation of banking and commerce in Ireland makes financial transactions faster and easier, but also harder to monitor effectively. Fraudsters can swiftly move illicit funds through complex networks of international accounts, disguising their tracks.”
A risk-focused organisational culture that prioritises vigilance against financial crime is required.
“This starts from the top, with senior executives emphasising compliance and ethical business practices,” says O’Flaherty. “Regular training and awareness programmes for employees, especially frontline staff who handle transactions, are critical. Collaboration is also key. Initiatives like Ireland’s FraudSMART programme illustrate how businesses and public agencies can effectively share intelligence, reducing vulnerabilities.
“Ultimately, combating financial crime requires viewing compliance not merely as a regulatory measure, but as a strategic imperative to protect people, reputations, profits and Ireland’s broader economic health.”
Personal awareness remains the strongest shield against financial crime for individuals, O’Flaherty advises.
“You are your own best defence; everyday vigilance is essential. Protect your data online. If the deal looks too good, it is. Don’t respond to any texts, calls or emails that are out of the ordinary. Don’t click any links or share any of your details, never rush into financial decisions under pressure. Report any suspicious activity to your bank and the Gardaí promptly; your action could help prevent further harm in your community.”
Playing for keeps in the sandbox
Organisations should also leverage the latest technology in the fight against financial crime and an initiative launched by the Central Bank in late 2024 is supporting the development of new solutions.
“The Innovation Sandbox allows selected firms to develop and test technologies aimed at tackling financial crime, such as fraud detection, anti-money-laundering (AML) compliance and digital identity verification, within a supervised, collaborative setting,” explains Puneet Kukreja, EY UK and Ireland cybersecurity leader.
Sandbox participants build and refine their tools in close partnership with regulators, gaining feedback as they go, he adds.
“It ensures innovation works not just in theory but in practice, and under real-world conditions. By fostering trust and dialogue the sandbox helps fast-track innovation that might otherwise be slowed by compliance uncertainty.”
Importantly, the Innovation Sandbox programme gives Irish innovators a platform to scale. “Technologies developed here are more likely to meet the standards required in Europe, the UK, and the US – markets that are tightly regulated and highly competitive,” says Kukreja. “This gives Irish firms the credibility they need to grow and export solutions with confidence.”
The programme runs on a six-month cycle, where selected firms enter as a cohort and are supported through structured activities, he continues. “Crucially, participants gain access to a secure data platform, where they can test algorithms using anonymised or synthetic data sets, reducing risks to consumer data.”
Solutions under development by the seven firms participating in the sandbox at present include anti-phishing tools, insurance fraud detection and age verification, according to Kukreja. Expleo is developing a mobile tool to stop phishing scams; Forward Emphasis and Pasabi are focused on presale insurance fraud detection; Roseman Labs enables privacy-compliant data collaboration using secure multiparty computation; Sedicii and PTSB are trialling real-time identity verification using zero-knowledge proofs; and TrustElevate is tackling age and parental verification, aligning with global efforts by Yoti in child safety compliance.
“These firms represent both home-grown innovation and global best practices, tailored to meet the Central Bank’s high standards,” Kukreja points out. “Several participants are already trialling tools with financial institutions and real-world integration may not be far off. In fact, we could see the first solutions hitting the market in the second half of this year.
“With the right support, Ireland’s sandbox could produce technologies that not only seve local markets, but also set global standards, offering financial institutions new tools to stay ahead of fraud, laundering, and abuse.”
