U.S. Treasury Launches Data-Driven Approach to AML Enforcement, Border Security
The U.S. Financial Crimes Enforcement Network (FinCEN) announced a sweeping enforcement operation in late December 2025, signaling a new chapter in how the United States will use financial intelligence to confront illicit cross-border activity in years to come. Surpassing simple compliance checks, this concerted effort represented an uptick in use of data analytics to maintain the integrity of the American financial system, while addressing specific vulnerabilities that remain present from a financial crime perspective at the national level.
Unlike traditional enforcement actions targeting single entities after identifying specific red flags or triggering alerts, the U.S. Treasury Department’s Financial Crimes Enforcement Network’s (FinCEN) latest operation integrated the unprecedented use of high-performance data processing to scan millions of records — including more than one million Currency Transaction Reports (CTRs) and approximately 87,000 Suspicious Activity Reports (SARs). Using this data set, FinCEN analysts were able to identify over 100 money services businesses (MSBs) operating near the southwest border of the United States that warranted further scrutiny. Those operating in this region of the country face great pressures given their increase in exposure to neighboring illicit activity – most notably the laundering of funds derived from drug trafficking and illegal alien smuggling.1 As such, the new move joins a growing list of efforts taken by the Trump Administration to secure the border and combat international drug cartels and transnational criminal organizations.
MSB’s — such as check-cashing outlets, remittance providers, and money transmitters – provide financial services outside of a traditional banking structure. These outlets have become highly vulnerable to money laundering activity due to the reduction in oversight and due diligence maintained at these entities as compared to traditional banks, as well as their inherent propensity for being cash-intensive and processing a high number of daily transactions, allowing illicit activities to slip through the cracks. MSB’s are also far more inclined to facilitate international transactions, offering cross-border transfer capacity that occurs both quickly and discreetly, making tracing the origin and destination of funds all the more challenging for financial authorities.
While still in its initial phase, the operation has produced a series of concrete actions. Thus far, six notices of investigation have been issued, dozens of examination referrals have been made to the Internal Revenue Service (IRS), and more than 50 compliance outreach letters have been sent to MSBs that appeared to be non-compliant with current statutes of the U.S. Bank Secrecy Act (BSA) upon analysis.1 The range of responses reflects a tiered enforcement approach now backed by the Treasury – from education and engagement to formal legal investigations for non-compliance – with the goal of motivating the covered entities into completing their voluntary compliance requirements, while reserving more aggressive measures (such as fines, sanctions and cease of operations) for more blatant and/or willful violations.
All told, the operation is part of a broader modernization push aligning with the more modern financial sphere seen today, emphasizing advanced technology and data to make enforcement of illicit financial activity more effective. This strategy aligns with broader trends in AML enforcement seen since the turn of the decade, where both government agencies and financial institutions increasingly rely on analytics, large data sets, and cross-agency partnerships to disrupt transnational crime. While historically enforcement actions taken by the U.S. government have focused more heavily on thwarting drug trafficking exploits on the frontlines, this initiative seeks to limit the various financial flows feeding criminal organizations, which remain arguably the most critical component allowing these networks to continue their destabilizing activities. This effort now joins other recent AML efforts, which includes stricter transaction reporting thresholds in certain border ZIP codes, to create a more comprehensive and far-reaching anti-money laundering strategy for this region of the country and beyond.
“At President Trump’s direction, the Treasury Department is utilizing all tools to stop terrorist cartels, drug traffickers, and human smugglers,”1 said Secretary of the Treasury Scott Bessent discussing the initiative. “This sweeping operation will help root out potential cartel-related money laundering from the U.S. financial system.”1
The truth remains however that MSB’s remain vital sources of legitimate financial access for certain demographics, especially underserved communities facing “de-banking” due to financial risk. Antagonists of this effort fear that increasing regulatory burdens on MSB’s could further impede lawful economic activity in these areas and further restrict access to financial services, continuing the cycle of cash-based crime. As such, they have called for clear-cut guidance and support to avoid unnecessary repercussions. Still the benefits of modernizing government enforcement capabilities and leveraging advanced data tools remains essential in today’s increasingly complex world to stay ahead of sophisticated financial criminals, and FinCEN’s move to avoid immediate retaliatory actions against the MSB’s identified in their analysis appears to be a solid first step however towards striking a balance in this regard. Only time will tell what the effects of these early exploits will hold for the future of regulatory compliance and enforcement however.
Citations
- S. Department of the Treasury, Financial Crimes Enforcement Network. (2025, December 22). FinCEN announces data-driven border operation to address potential money laundering[Press release]. U.S. Department of the Treasury.