Next generation AML solutions: an analysis of ai-based tools vis-à -vis the reform of the European AML institutional and substantive architecture

Despite massive policy efforts, persistent deficiencies, inconsistent enforcement, and regulatory fragmentation continue to undermine the effectiveness of anti-money laundering and counter-terrorist financing (“AML/CTF”) frameworks. This article investigates the fascinating intersection between technological innovation and AML regulation, arguing that emerging technologies, particularly artificial intelligence (“AI”) and machine learning (“ML”), have become both a catalyst for regulatory change and a potential remedy for systemic shortcomings. The article first examines the structural ineffectiveness of current AML regimes. It then analyzes the evolution of international standards and EU reforms, focusing on the 2024 “AML package,” which includes the creation of the Anti-Money Laundering Authority (“AMLA”) and the so-called AML single rulebook (the AML Regulation or “AMLR”). Against this backdrop, the article explores whether and how emerging technologies could aid obliged entities in fulfilling increasingly demanding customer due diligence and transaction monitoring obligations. By integrating insights from the growing literature on RegTech and conducting a comparative regulatory and standard-setting assessment, the study conceptualizes AI not merely as a compliance tool but as a transformative organizational instrument. It argues in fact that in light of the growing emphasis on efficient and risk-sensitive AML internal governance, AI-driven solutions are likely to become a de facto requirement for financial institutions to meet their AML obligations. Ultimately, the article contends that the future of AML effectiveness will hinge on reconciling technological capability with normative legitimacy, characterizing AI-based solutions as an essential component of an efficient and adequate AML internal governance.