How AI is reshaping AML to target drug trafficking

May 22, 2025

As the fentanyl crisis intensifies, Canada is turning to technology to curb drug trafficking and its financial enablers.

Napier AI, which offers a next-generation intelligent compliance platform, recently delved into how AML can help combat the fentanyl crisis in Canada

In 2024, border authorities seized over 10lbs of fentanyl entering from the US, while the US intercepted more than 32lbs from Canada. This cross-border tension has led to a 25% US tariff on Canadian goods and sparked calls for tougher anti-money laundering (AML) measures.

Fentanyl trafficking is not limited to North America. Chinese chemical suppliers and Mexican cartels remain central to the trade, and Canada’s $1.3bn border security plan is only one part of the solution. Financial institutions are being called upon to detect and disrupt the financial flows that support this illicit activity.

FINTRAC’s recent operational alert revealed the role of online gambling platforms in laundering fentanyl profits. In one case, a payment processor disguised gambling payments as routine e-transfers, evading suspicion. The alert draws from 5,000 suspicious transaction reports filed between 2020 and 2023.

To strengthen AML efforts, financial institutions should enhance KYC and CDD processes during onboarding, especially for shipping and transport companies that may be exploited. They must also upgrade transaction monitoring with data analytics to identify hidden patterns, and use AI to continuously screen clients for evolving risks.

The Napier AI / AML Index suggests Canada could recover $65bn by embracing AI-driven compliance strategies. Globally, the potential savings exceed $3tn.

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