# FATF new technologies for AML/CFT report (2021): Opportunities and Challenges of New Technologies for AML/CFT

Source: https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021
Last updated: Oct 15, 2026

The FATF's report 'Opportunities and Challenges of New Technologies for AML/CFT', finalised at the June 2021 Plenary and published on 1 July 2021, is the standard-setter's position that technology — digital identity, transaction monitoring and analysis solutions including machine learning, and collaborative analytics — can make AML/CFT measures faster, cheaper and more accurate when used responsibly and on a risk-based basis. It identifies available and emerging solutions, the conditions needed to deploy them and the obstacles that block them, and its suggested actions ask for explainability and transparency, human oversight, privacy and data protection, strong cybersecurity and alignment with standards in any new AML/CFT solution. It is non-binding and does not change the FATF Recommendations.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) |
| Type | Report |
| Status | Final |
| Published | Jul 1, 2021 |
| Applies to | FATF member authorities and AML/CFT supervisors; financial institutions and other reporting entities using technology, including machine learning and collaborative analytics, for AML/CFT compliance (non-binding) |
| Official text | https://www.fatf-gafi.org/en/publications/Digitaltransformation/Opportunities-challenges-new-technologies-for-aml-cft.html |

## Key points

- Finalised at the 21–25 June 2021 Plenary under the German Presidency's digital-transformation project, which also discussed 'the use of advanced analytics and machine learning in detecting suspicious activities', and published on 1 July 2021 with the data-pooling stocktake.
- Defines new technologies for AML/CFT as 'innovative skills, methods, and processes that are used to achieve goals relating to the effective implementation of AML/CFT requirements' or 'innovative ways to use established technology-based processes to comply with AML/CFT obligation'.
- Frames the benefit as speed, quality and efficiency: technology can help institutions and supervisors assess risks 'in ways that are more accurate, timely and comprehensive' and, used responsibly, improve financial inclusion by bringing more people into the regulated system.
- Suggested action on safeguards: new AML/CFT solutions should have 'explainability and transparency of processes and outcomes; oversight by humans; respect for privacy and data protection; strong cybersecurity; and alignment with global, national, and technical standards and best practises'.
- Suggested actions on privacy: a valid legal basis for processing personal data, protection in line with national and international frameworks, processing for 'explicit, specified and legitimate purposes', and support for privacy-preserving technologies for information sharing.
- Suggested actions for authorities: policies that are 'flexible, technology-neutral, outcomes-based and in line with the risk-based approach'; issuing or updating policy statements, guidance, use cases or regulations to encourage responsible use; building expertise for 'informed oversight'; and using technology in supervision itself.
- The FATF's December 2025 AI horizon scan cites the report as its baseline, quoting its finding that AI and machine learning can 'enhance the capabilities of actors to respond to risks and implement requirements more effectively'.

## What changed for banks

It turned the FATF's 2017 'San Jose Principle' of encouraging responsible innovation into a documented set of suggested actions, giving supervisors a global reference for the position that machine-learning monitoring and digital onboarding are compatible with the FATF Standards when they are explainable, human-overseen, privacy-respecting and risk-assessed before launch. Later national documents — the HKMA's 2024 AI-in-AML circular and FinCEN's 2026 AML/CFT programme proposal counting 'effective use of artificial intelligence' in a bank's favour — point the same way.

## Use cases it governs

- [AML / KYC](https://www.bankingnewsai.com/ai-regulation/by-use-case#aml-kyc)
- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Data & privacy](https://www.bankingnewsai.com/ai-regulation/by-use-case#data-privacy)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)

## What does the FATF say banks and supervisors should do about new technologies for AML/CFT?

The report's suggested actions are grouped under six headings rather than numbered articles. They ask governments and the private sector to create an enabling environment for responsible innovation with explainability, human oversight, privacy, cybersecurity and standards alignment built into new solutions; to ensure a legal basis and purpose limitation for personal data; to design innovation that supports financial inclusion; to adopt flexible, technology-neutral, outcomes-based and risk-based policies; to build the expertise for informed oversight and use technology in supervision; and to cooperate across authorities, including data-protection authorities, and internationally. None is binding; together they are the closest thing to a FATF checklist for an AI programme in AML.

| Rule | Authority | What it requires | Status | Source |
| --- | --- | --- | --- | --- |
| Suggested actions — create an enabling environment | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | Innovative solutions that facilitate AML/CFT measures (risk assessments, CDD and other requirements) and strengthen supervision; good practices for updating or replacing legacy systems; safeguards of 'explainability and transparency of processes and outcomes; oversight by humans; respect for privacy and data protection; strong cybersecurity' and alignment with standards. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |
| Suggested actions — ensure privacy and data protection | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | A valid legal basis for processing personal data; protection in line with national and international frameworks; processing for 'explicit, specified and legitimate purposes'; support for privacy-preserving technologies that enable AML/CFT information sharing and analysis. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |
| Suggested actions — financial inclusion by design | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | Mitigate obstacles to financial inclusion through innovative solutions and keep innovation consistent with the FATF's financial-inclusion objective. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |
| Suggested actions — flexible, technology-neutral, outcomes-based policy | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | Consider new technologies holistically, including unintended consequences; issue or update 'clear policy statements, guidance, use cases, best practises or regulations' to encourage responsible use; consult counterparts and regulated entities. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |
| Suggested actions — exercise informed oversight | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | Build expertise in new technologies to enable informed regulation and supervision; identify explicit uses for supervision and examination; understand the risks, benefits and mitigations; use technology to enhance AML/CFT supervision. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |
| Suggested actions — promote and facilitate cooperation | [FATF](https://www.bankingnewsai.com/ai-regulation/fatf) | Coordinate across all relevant authorities including data protection and privacy authorities; consider collaborative environments for public-private research and development; join international efforts on global principles aligned with human rights, cybersecurity and data protection. | Suggested action, July 2021 (non-binding) | [FATF new technologies for AML/CFT report (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-new-technologies-aml-cft-2021) |

### What this means in practice

- Use the five safeguards (explainability, human oversight, privacy, cybersecurity, standards) as headings in the model documentation of any AI monitoring or screening tool: they are what a FATF-aligned supervisor will look for.
- Record the legal basis and purpose for every data source an AML model consumes, including data obtained from other institutions or utilities.
- Expect supervisors to use technology in examinations themselves; the report asks them to.

## FAQ

### Does the FATF 2021 new technologies report require banks to use AI?

No. It is a non-binding report that encourages responsible, risk-based use of new technologies, including machine learning and collaborative analytics, and sets out suggested actions for authorities and the private sector. The obligations remain the FATF Recommendations as implemented in national law.

### What safeguards does the FATF expect in AI-based AML tools?

Its suggested actions name five: explainability and transparency of processes and outcomes, oversight by humans, respect for privacy and data protection, strong cybersecurity, and alignment with global, national and technical standards and best practices.

## Related documents

- [FATF horizon scan on AI and deepfakes (2025)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-horizon-scan-ai-deepfakes-2025) — Horizon Scan: Artificial Intelligence and Deepfakes — Impacts on Money Laundering, Terrorist Financing and Proliferation Financing (Dec 22, 2025)
- [FATF data pooling and collaborative analytics stocktake (2021)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-data-pooling-collaborative-analytics-2021) — Stocktake on Data Pooling, Collaborative Analytics and Data Protection (Jul 1, 2021)
- [FATF Guidance on Digital Identity (2020)](https://www.bankingnewsai.com/ai-regulation/documents/fatf-digital-identity-guidance-2020) — Guidance on Digital Identity (Mar 6, 2020)
- [FATF Recommendations](https://www.bankingnewsai.com/ai-regulation/documents/fatf-recommendations) — International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation: The FATF Recommendations (consolidated text updated October 2025) (Feb 15, 2012)
- [FIN-2026-Alert005 (Digital Asset Investment Scam Centers)](https://www.bankingnewsai.com/ai-regulation/documents/fincen-alert-2026-scam-centers) — FinCEN Alert on Money Laundering Activity Associated with Digital Asset Investment Scam Centers (Sep 3, 2026)
- [FIN-2026-Alert004 (Federal Student Aid Fraud)](https://www.bankingnewsai.com/ai-regulation/documents/fincen-alert-2026-federal-student-aid-fraud) — FinCEN Alert on Fraud Schemes Targeting Federal Student Aid (Jul 24, 2026)
- [Hill House oversight testimony (Jun 2026)](https://www.bankingnewsai.com/ai-regulation/documents/fdic-testimony-oversight-prudential-regulators-2026) — Statement of Chairman Travis Hill: Oversight of Prudential Regulators (Jun 4, 2026)
- [SR 26-2](https://www.bankingnewsai.com/ai-regulation/documents/fed-sr-26-2) — Revised Guidance on Model Risk Management (Apr 17, 2026)

Last reviewed Oct 15, 2026. Cite the official text (https://www.fatf-gafi.org/en/publications/Digitaltransformation/Opportunities-challenges-new-technologies-for-aml-cft.html) for the rule and this page for the summary and dates.

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