The UK and US top the list of global money laundering hotspots, with experts maintaining that prevention is better than cure for the global scourge.

The UK ranks second among global money laundering hotspots, with an estimated £88 billion ($119 billion) laundered each and every year.

In the US, the figure stands at £216.5 billion laundered every year, by far the highest sum among OECD (Organisation for Economic Co-operation and Development) countries.

It is estimated that worldwide, the total sum of money laundered annually equates to as much as 3 per cent of global GDP – a huge £1.8 trillion, according to new figures from identity verification service Credas.

Among OECD member states, the sum of money laundered in the UK is estimated to sit at 1.9 per cent of GDP, although this climbs as high as 6.1 per cent in Belgium, with the UK sitting fourth in the table at 4.3 per cent. However, when taking the GDP of each nation into account, the UK jumps to second in the table, with this 4.3 per cent of GDP equating to a huge £87.9 billion of money being laundered annually.

France (£54.5 billion), Germany (£51.3 billion) and Canada (£25.6 billion) also rank within the top five. In contrast, Iceland sits at the bottom of the OECD rankings, with just £370 million in money laundering value, followed by Estonia (£703.4 million) and Latvia (£750 million).

“The practice of money laundering is as old as the hills and it’s one area of criminal activity that is incredibly tricky to eradicate as it can be done in such a vast and varied number of ways,” Tim Barnett, chief executive officer of Credas Technologies, said. “It’s also a practice that continues to evolve with the times and in more recent years we’ve seen criminals utilise online banking, cryptocurrencies and, most recently, NFT marketplaces, in order to wash dirty cash."

"Prevention is always better than cure and our technology is deployed the length and breadth of the nation and across a multitude of sectors to ensure that businesses are safeguarded against this illegal activity," he added.

There have been a series of global money laundering scandals, including the worst one in Asian financial history, 1MDB, which resulted in Singapore removing the local licences of two banks – BSI and Falcon Private Bank. Just this week a former Goldman Sachs banker has gone on trial accused of misappropriating more than $2.7 billion dollars from the Malaysian fund, embezzling the money to purchase luxury real estate and art, as well as to finance Hollywood films. Separately, the UK’s financial watchdog fined NatWest £264.7 million in December for failing to follow AML regulations.

Money laundering is measured in trillions of dollars, creating a headache for banks and other intermediaries. The amount of money laundered annually stands at $1.6 to $2 trillion; less than 1 per cent of this laundered money is traced, according to New York-based Broadridge Financial Services.

As a result, banks spend a lot of money on regulatory technology to ensure that their onboarding, KYC and anti-money laundering procedures are rigorous and fit for purpose. But many wealth management firms are still over-reliant on manual compliance checks for processes such as KYC and anti-money laundering, and have no plans to automate, according to LexisNexis Risk Solutions.