Nasdaq CEO Takes on Financial Crime at The World Economic Forum in Davos

Amid ongoing geopolitical and economic uncertainty, heads of state and leaders from private and public sectors convened at the World Economic Forum’s annual meeting in Davos, Switzerland this week to address “rebuilding trust” in an increasingly complex world.  While in attendance at Davos, Nasdaq Chair and CEO Adena Friedman shared stark, new findings from Nasdaq’s 2024 Global Financial Crime Report on the scale and impact of financial crime around the world. In response to these findings, Friedman spotlighted how Nasdaq is working diligently to reinforce the trust in our financial system by taking a leading role in the fight against financial crime. 

The Toll of Financial Crime 

Financial crime is a multitrillion-dollar problem. According to Nasdaq findings, an estimated $3.1 trillion in illicit funds flowed through the global financial system in 2023. The report developed with Verafin, a Nasdaq company, brings together expert research, industry perspectives, and the voices of survivors, with the aim of providing global financial institutions with a better understanding of the scope and impact of financial crime, and the scale of coordination needed to address it.  

Last year alone, losses from fraud totaled $485.6 billion globally. Money laundering and illicit flows accounted for trillions of dollars, including some of the most heinous offenses: 

• $782.9 billion in drug trafficking activity
• $346.7 billion in human trafficking
• $11.5 billion in terrorist financing

These numbers don’t encompass the entirety of financial crime, as many crimes go unreported and undetected.  

“It's such an enormous problem and it's a global problem,” said Friedman, speaking to Yahoo Finance at Davos. 

These crimes also negatively affect communities around the globe, often targeting the most vulnerable members of society — from scammers preying on the elderly to traffickers who commodify innocent people out of greed — financial crime is global epidemic.

Check out Lila’s story from the 2024 Global Finance Crime Report. 

How Nasdaq Fights Financial Crime with Verafin 

Among the highest concerns of the 209 Anti-Financial Crime (AFC) professionals and bank executives surveyed is fraud on real-time and faster payment rails. More than half (52%) of respondents worry about fraud attempts from new payments systems because they come with many unknowns for AFC programs.  

As technology advances, financial criminals gain new avenues to exploit the financial system. “Criminals use whatever is available to them. So, banks need to be able to leverage the same amount of technology to be able to protect the system as well,” said Friedman. 

Nasdaq’s anti-financial crime solutions include Verafin, which supports 2,500 financial institutions across North America with sophisticated artificial intelligence (AI) technology that can detect patterns of illicit activity and alert banks to potential fraud or money laundering.

“You can really start to look at the typologies of criminal behavior, and then use AI in order to...root out that behavior across the system,” said Friedman. 

This is why fighting financial crime requires collective action. According to Friedman, “It has to be a public-private partnership. It has to be banks working together, [sharing] information so that they can actually tackle the problem and work closely with law enforcement.” 

As technology advances and criminals become more sophisticated in their money laundering and fraud efforts, with Verafin’s comprehensive suite of AFC solutions and established regulatory technology leadership, Nasdaq is poised to help banks effectively and efficiently fight financial crime.  

“We have to look at solving this problem of financial crime in the same way, with the same technology, and the same capabilities, but at a faster speed and with more precision,” said Friedman.