A new report by the Financial Action Task Force (FATF) warns that global illicit finance is entering a far more sophisticated phase, driven by the rapid evolution of underground banking, hawala networks, and digital money‑laundering ecosystems. The watchdog says these systems are increasingly using virtual assets, fintech platforms, and even formal banking channels to move illegal funds across borders with unprecedented speed.
FATF notes that Hawala and Other Similar Service Providers (HOSSPs) remain central to underground finance. In several cases, more than $500 million was laundered through hawala‑based schemes within just a few months. Over 80% of reporting jurisdictions identified underground banking as one of the primary professional money‑laundering techniques, underscoring how widespread the problem has become.
The report highlights the rise of “money laundering as a service” — a commercialised model where criminal groups outsource laundering tasks to specialised networks. These networks operate like businesses, offering scalable, cross‑border operations, lower commission rates, and the ability to move large volumes of value quickly.
FATF also warns that professional money launderers are increasingly integrating with the formal financial sector, exploiting regulatory blind spots. They use bank accounts, fintech apps, payment service providers, virtual IBANs, prepaid cards, and crypto wallets to disguise illicit flows. Nearly 70% of respondents reported a shift toward “digital hawala,” where traditional informal systems merge with digital tools.
The report further flags growing involvement of lawyers, accountants, auditors, notaries, corporate formation agents, real‑estate brokers, casinos, and junket operators — all of whom can be used to layer and disguise illegal transactions.