By Tejan Macavoray
Global financial institutions are preparing for a significant rise in losses due to fraud, with projections estimating an increase from USD23 billion in 2025 to USD58.3 billion by 2030. This 153 percent jump, reported by Juniper Research and summarized by OCCRP, reflects the rapid evolution of criminal strategies. A major driver is synthetic identity fraud, where false personas are built from both real and fabricated data, making them difficult to detect through conventional verification systems.
The challenge is not limited to banking alone. The Secretariat’s Global Financial and Economic Crime Outlook 2025 projects that illicit financial flows—including fraud, money laundering, and corruption—could rise to USD4.5–6 trillion globally by 2030. The rise of artificial intelligence, cryptocurrency platforms, and virtual assets is increasing both the speed and sophistication of financial crimes.
The IMF’s Global Financial Stability Report (April 2024) identifies cybercrime, identity theft, and digital payment fraud as growing risks to financial stability, especially in countries where regulatory and monitoring frameworks lag behind technological adoption.
Sierra Leone has experienced rapid growth in digital financial services in recent years. According to the World Bank’s Digital Financial Services Snapshot, mobile money penetration reached over 40% of the adult population in 2023, driven by widespread smartphone adoption and an extensive agent network. These services were pivotal during the Ebola crisis, facilitating payments to frontline health workers, and continue to serve as critical tools for remittances, government disbursements, and small business transactions.
Despite these gains, the 2023 World Bank Financial Inclusion Project—supported with a USD40 million grant—highlights significant regulatory and operational gaps. Key concerns include limited real-time monitoring of mobile transactions, weak enforcement of anti-money laundering (AML) regulations, and underdeveloped consumer protection mechanisms. Consequently, digital finance expansion carries a parallel rise in fraud vulnerability.
The Bank for International Settlements (BIS) classifies digital fraud into four main types: unauthorized transactions, account takeovers, data manipulation, and synthetic identity creation. Effective mitigation requires integrating technology-enabled detection with proactive regulatory oversight.
The Financial Action Task Force (FATF) guidelines, including its recommendations on virtual asset service providers, provide an internationally recognized framework for AML/CFT compliance. Sierra Leone’s alignment with FATF standards is partial, and gaps in virtual asset regulation expose financial institutions to cross-border fraud networks. Implementing real-time reporting, automated risk assessments, and strengthened supervision is critical to closing systemic vulnerabilities.
Key Risks for Sierra Leone
• Synthetic identity and mobile money fraud: Without AI-enabled detection and continuous monitoring, these risks may escalate rapidly.
• Regulatory weaknesses: Insufficient AML/CFT enforcement and limited oversight of digital financial assets increase exposure to illicit transactions.
• Cross-border threats: Sophisticated international fraud networks can bypass local enforcement capacity, posing systemic risks to financial stability.
Financial crime is expanding globally, threatening both stability and inclusion in digital economies. For Sierra Leone, these challenges are significant but manageable. By strengthening detection systems, reinforcing regulatory frameworks, and adopting international best practices, the country can protect its digital finance sector, safeguard public trust, and continue leveraging technology to drive inclusive economic growth.
