Regulator calls on Irish firms to step up efforts against ‘corrosive’ financial crime risks

Patricia Dunne, director of horizontal supervision with the Central Bank of Ireland (CBI), said that the regulator expected firms in Ireland to show improvement in their anti-money laundering and combating the financing of terrorism frameworks to make sure they keep pace with a rapidly changing technology sector.

“We will continue to be proactive in communicating our expectations to the firms we regulate recognising the first principle that regulated firms are responsible for identifying the financial crime to which they are exposed - and taking appropriate measures to mitigate those risks for the benefit of their customers,” she said.

Her comments come as the Garda report this year has already seen the highest number of money-laundering arrests since 2017.

Dunne, speaking at the European Anti-Financial Crime Summit in Dublin, said the CBI expected firms to show “resilience, adaptability and trustworthiness” in how the industry collectively response to the risk of financial crime in Ireland.

Her comments come after the CBI spelled out its regulatory outlook for the forthcoming year, with how firms respond to change one of the central planks of its plans for 2026 – including how firms manage operational resilience around digitalisation, data and cyber attacks.

While digitalisation is leading to new capabilities and benefits for consumers with easy to financial services, it is also leading to an increase in the risk of fraud and financial crime, Dunne warned.

“We sometimes refer to the ‘plumbing’ of the financial system,” she said.

“Financial crime is like acid gushing through the pipes deeply corrosive, dangerous and, at volume, capable of doing immense damage. There is the direct impact on the victims of this crime – and a wider, cumulative impact on trust in the system.

“The speed of this impact is increasingly supported by technology. As Europol notes, ‘emerging technologies, such as artificial intelligence, accelerate crime and provide criminal networks with entirely new capabilities. These innovations expand the speed, scale, and sophistication of organised crime, creating an even more complex and rapidly evolving threat landscape’.”

As part of that, she called on boards and senior management in banks to demonstrate an understanding of money laundering and terrorist financing risks they faced.

Alongside the CBI’s regulatory outlook, Ireland will shortly issue its latest National Risk Assessment, looking at the current nature and scale of the money laundering and terrorist financing threat in the country.

Sarah Twohig, a financial litigation expert with Pinsent Masons in Dublin, said the director’s comments put a spotlight on companies’ own responsibilities in battling financial crime.

“The Central Bank regulates and supervises the financial system to combat and prevent financial crime,” she said.

“However, it is clear in its expectation that the firms it regulates are first and foremost responsible for identifying financial crime risks and implementing safeguards to protect against those risks in the interests of customers and the wider financial system.

“Firms should actively monitor financial crime risks and take into account the evolving nature of financial crime as a result of rapid digitalisation, as making early legal assessments of obligations form a key part of any financial crime incident response strategy and can be critical for mitigating risk should an incident occur.”