Sweden’s strong digital infrastructure and trusted institutions have helped it build a solid reputation in financial services, especially when it comes to tackling money laundering and terrorist financing. However, the nature of financial crime is changing, and Sweden must now evolve with it.
RegTech company Napier AI recently delved into whether AI could help fix Sweden’s compliance challenges.
The country’s financial watchdog, Finansinspektionen, raised concerns in its March 2025 report on money laundering and terrorist financing risks. The report highlighted that digital banks, digital asset platforms, small and mid-sized banks, and client fund accounts now represent the most vulnerable areas in the system. As financial services become more digital, so do the tactics of financial criminals—posing fresh challenges for compliance teams.
To counter these risks, the use of artificial intelligence and automation is becoming increasingly vital. These technologies allow financial institutions to make sense of complex ownership structures, identify suspicious transactions in real-time, and respond to threats with greater agility. But technology alone isn’t enough. Sweden needs to ensure that these solutions are backed by robust, coordinated compliance strategies.
In its last mutual evaluation in 2017, the Financial Action Task Force (FATF) noted that Sweden’s AML efforts suffered from a lack of national coordination. While individual authorities understood the risks, the absence of a unified strategy meant they weren’t always aligned. The cost of this inefficiency has been steep—financial crime cost Sweden 3.44% of its GDP in 2023, equivalent to SEK 260bn, Napier AI said.
Napier AI’s AML Index, which measures the effectiveness of AI in combating financial crime, gave Sweden a score of 4.57 out of 10. Although this places Sweden in a relatively strong position, the index suggests the country could recover SEK 108.64bn annually if AI tools were fully leveraged across the sector.
Regulation is also shifting. The EU’s Digital Operational Resilience Act (DORA), which came into force in January 2025, aims to strengthen digital infrastructure across the financial system. Meanwhile, new rules from the European Banking Authority and the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) are expected to reshape how institutions approach compliance.
Yet despite Sweden’s investments in AI and its digital advantage, many banks are still at the planning or pilot stage when it comes to applying AI to AML processes. Even the country’s largest institutions acknowledge the gap between what technology can achieve and what regulators currently approve.
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