Breaking the chain: The role of financial crime compliance in the fight against human trafficking

With human trafficking now estimated to be a global industry worth up to $498 billion, financial institutions (FIs) have a crucial role to play in dismantling the networks that exploit the vulnerable.

Speaking as part of our CATALYST global event series, former Wall Street executive and Stop the Traffik volunteer Taskeen Hamidullah-Bahl challenged the industry to look past the “noise” of data and see the human faces behind transaction monitoring alerts.

This article summarizes Taskeen’s insights, exploring the crucial role of technology and proactive compliance in the fight against human trafficking and other financial crimes. 

The changing face of modern slavery

Approximately 50 million people are currently trapped in modern slavery worldwide, with the US Department of Homeland Security having confirmed human trafficking reports in every single US state and territory. The vast majority of these profits flow through legitimate financial systems, making banks and other FIs involuntary participants in criminal activity. 

An essential insight for compliance teams is that this activity takes place on a wide spectrum of typologies, with human trafficking not restricted to a standard chain of events or geographic pattern. 

Consider these two examples, based on real-life cases shared by Taskeen at CATALYST. Case A involves a ten-year-old boy from rural India forced into labor on fishing trawlers under the guise of a government-backed vocational scheme, a form of trafficking hidden in plain sight within global supply chains. Case B, meanwhile, centers around a college-educated woman in New Jersey coerced into sex trafficking through identity theft, threats, and psychological control. These stories highlight the grim reality that, regardless of your organization’s location, trafficking risks are rarely far away.

Within a context of diversifying criminal typologies, advanced risk intelligence has never been more important. The regulatory landscape is increasingly leaning into data-sharing across organizations and public-private partnerships; sanctions imposed by the Office of Foreign Assets Control (OFAC) in 2025 against a co-ordinated human trafficking network spanning four continents and multiple business sectors offers one blueprint for success. When FIs focus on high-quality data gathering and collaboration with other organizations, including law enforcement agencies, they can focus on dismantling entire networks rather than just closing individual accounts. 

Moving beyond check-box compliance

For compliance officers, detecting genuine threats amid a sea of alerts and false positives is a recurring challenge. With regulators becoming increasingly concerned that analysts are becoming desensitized by the sheer volume of alerts, integrating expert insights, including from survivors, into compliance processes can be hugely beneficial. 

When analysts understand the mechanics of how trafficker controls victim bank accounts, for example, they are more likely to spot the subtle anomalies that the system might otherwise overlook. This is particularly important when trafficking typologies are evolving rapidly. While traditional red flags often focus on industries like massage parlors or strip clubs, trafficking is increasingly embedded in seemingly benign sectors, such as construction and landscaping, hospitality, and manufacturing. 

To stay ahead, external resources, whether from regulators or specialist anti-human trafficking organizations, can be invaluable for firms. Firms with a presence in the US, for example, should pay close attention to advisories from the Financial Crimes Enforcement Network (FinCEN) on the subject, which provide data and trend analyses that help analysts distinguish between standard commercial activity and the subtle patterns of suspicious behavior.

Compliance teams must also move beyond “check-box” suspicious activity report (SAR) filing procedures by focusing on generating actionable, identifiable information through the use of data and expertise. 

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The double-edged sword of AI

As financial institutions look to invest in artificial intelligence (AI) to enhance their ability to detect risks and streamline compliance processes, so too are bad actors rapidly adopting technology for their own purposes; for example, criminal networks now utilize AI chatbots and social media scraping to identify and groom vulnerable populations. 

However, FIs can reclaim the advantage with targeted AI adoption across key processes for combating human trafficking: 

• Identifying anomalies and suspicious behavior: AI-powered tools can identify red flags – from signs of account takeovers to suspicious transaction patterns – much faster than manual-only systems, allowing compliance teams to respond to criminal behavior in near-real time. 
• Ingesting a wider range of data: Newer or less traditional types of adverse media intelligence, including social media data, can be crucial in uncovering links to human trafficking and other kinds of financial crime. However, FIs have not always been able to make use of this information due to the difficulty of collecting and filtering vast amounts of unstructured data. 
• Training and testing: Some organizations are utilizing AI to aid in designing training programs that equip compliance teams to more effectively address trafficking risks, whether by optimizing systems with synthetic data or creating simulations that replicate real-life scenarios where real-time decision-making is crucial. 

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