Sweden has emerged as one of the leading examples of a cashless society, with digital payments accounting for nearly 90% of in-store transactions, according to Riksbank’s 2024 Payments Report.
The country’s rapid adoption of digital payment systems highlights both the benefits and risks of a system that relies heavily on electronic transactions. While the convenience, speed and cost-effectiveness of these systems are undeniable, they also create new opportunities for financial crime.
Napier AI, which offers a scalable and easily configurable suite of AML tools, has outlined three ways to detect financial crimes in Sweden.
Statistics show that cases of financial crime have more than doubled since 2019, growing in step with the surge in digitisation. Criminals have increasingly shifted towards using currency exchanges and informal value transfer networks, allowing them to convert small denominations into larger sums or move money across borders more discreetly, NapierAI explained.
These evolving methods underscore the need for advanced monitoring tools and updated regulatory frameworks to stay ahead of financial crime trends.
A key advantage of digital payments is the traceable data trail they generate. This transparency enables regulators and financial institutions to monitor suspicious activity, identify high-risk behaviour and intervene more effectively than with cash-based systems.
However, Swedish policymakers face the challenge of balancing crime prevention with accessibility. Proposals such as imposing caps on cash purchases, in line with EU rules, it said.
Cash still holds an important position globally, particularly in supporting financial inclusion. Examples from countries such as India and Brazil show how digital systems like UPI and Pix have expanded access for rural and previously unbanked populations. Yet, barriers such as lack of identification, poor connectivity and limited digital literacy remain. For these groups, cash remains essential, highlighting the risks of excluding vulnerable populations if the transition to cashless payments happens too quickly.
The Swedish Police have warned that eliminating cash entirely could push illicit flows into harder-to-detect digital channels. Digital assets and peer-to-peer platforms are already being exploited by criminals. A fully digital system could risk driving illegal activity further underground, bypassing traditional financial oversight altogether.
To counter these risks, NapierAI suggest three critical measures. First, transaction monitoring must evolve to detect unusual patterns, such as sudden spikes in activity from dormant accounts.
Second, compliance-first AI should be deployed to detect anomalies in customer behaviour and uncover sophisticated laundering attempts disguised as everyday transactions.
Finally, NextGen client screening is vital to continuously monitor customers throughout their lifecycle, preventing criminals from exploiting weak onboarding processes.
For more information about detecting financial crime, read the full story here.
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