Global economies could save $3.13 trillion by using AI to prevent and detect money laundering and terrorist financing, according to Napier AI.

The Napier AI / AML Index revealed that the US stands to gain the most from AI-powered financial crime compliance solutions, potentially saving financial institutions $23.4 billion on compliance costs, followed by Germany ($14.2 billion), and France ($11.08 billion).

Meanwhile, banks, payment firms and asset managers could save $138 billion on compliance costs by implementing AI into their anti-money-laundering strategies.

According to the report, while financial institutions spend heavily on crime compliance, the investment is justified when it recovers billions and strengthens safeguards.

However, AI tools can be used to both compliance and economic recovery while allowing institutions to spend money more effectively.

The report also found that money laundering poses a significant threat to countries worldwide as it cost the global economy $5.2 trillion in 2023.

In particular, 5% of global GDP, which is approximately $5.2 trillion, is funneled into the black market through money laundering.

Dr. Janet Bastiman, chief data scientist at Napier AI, explained that the more developed hubs around the world are at a greater risk of financial crime.

“Financial hubs are much more vulnerable to financial crime. Mature economies like Canada, the US and UK have effectively balanced open banking and AI innovation with the cost of managing financial crime risks.

“Fast-growing economies with strong financial services industries are looking to find this balance to reduce financial losses to the black market,”  she said.

This was evidenced as the United Arab Emirates has the highest GDP loss to financial crime globally, at 9.32%, followed by Brazil at 8.74%.

Whereas North America, the Nordics and Central Europe ranked as the top locations with the smallest percentage of GDP lost to money laundering.