Artificial intelligence is transforming industries at remarkable speed. But it’s not only legitimate businesses embracing the technology. Fraudsters and organised criminals are increasingly using AI to make scams more convincing and financial crime more sophisticated than ever.

It’s a reality that Charmaine Calleja, Head of Financial Crime Compliance and Money Laundering Reporting Officer (MLRO) at Lidion Bank, has witnessed first-hand throughout a career spanning almost two decades in compliance and financial crime prevention. Having spent the past six years helping shape Lidion’s growth, she has seen the landscape change more dramatically than ever before in such a short space of time.

“Financial crime has changed drastically because AI is changing the way crime evolves,” she explains. “Technology is helping us do our work, but it’s also changing the way fraud happens and how bad actors are targeting their victims.”

Charmaine points to a shift away from the traditional financial crime risks that once centred largely on tracing the origins of funds and identifying money laundering linked to offences such as tax evasion. While those responsibilities remain fundamental, the landscape today increasingly involves sophisticated online fraud, identity theft and impersonation scams. Criminals can convincingly imitate trusted organisations, or even well-known public figures, to persuade victims into handing over sensitive information or transferring money. As AI continues to make these scams more convincing, distinguishing genuine interactions from fraudulent ones is becoming increasingly difficult for both banks and the public alike.

Keeping pace with such an ever-changing threat landscape might sound like an impossible task, but Charmaine believes the answer isn’t trying to do everything alone. Instead, she explains, it starts with building the right team, creating robust processes and ensuring everyone across the Bank understands the role they play in protecting clients.

“My team has grown over the past six years, and I have very dedicated people who I trust completely,” she says. “Everyone specialises in a particular area, but we also support one another. Strong policies and procedures, supported by the right people and systems, are essential to effectively assess where the real risks lie and to concentrate our efforts where they matter most.”

That risk-based approach extends far beyond the FCC team. Charmaine is a firm believer that safeguarding the Bank is a shared responsibility, making education and open communication just as important as technology. By helping colleagues at Lidion recognise potential red flags and encouraging them to speak up whenever something doesn’t look right, the Bank is better placed to identify threats early and respond quickly. “I always tell my colleagues, ‘Come to me, whatever it is, and we’ll solve it together,’” she explains.

Beyond protecting the Bank and its clients, another responsibility of Charmaine's role is ensuring Financial Crime Compliance supports the Bank’s long-term growth plan. While the MLRO function is sometimes perceived as the department that slows business down, she is quick to challenge that assumption.

“I want to help attract business as much as everyone else in the Bank does because, at the end of the day, I want the Bank to do well. I’m there to assist, to ensure the Banks reputation is protected and that financial or reputational losses don’t occur.”

Achieving that balance starts with understanding the client. While Charmaine brings specialist expertise in financial crime, she relies on colleagues across the Bank to help build a complete picture of each business. “I may be more knowledgeable on money laundering issues, but my colleagues will know the client better than I do,” she says. “If there’s something I’m not understanding, I sit down with the team and try to understand it. What may seem unusual to me sometimes has a perfectly reasonable and legitimate explanation.”

That collaborative approach is particularly important given Lidion’s focus on sectors such as fintech, payment services and iGaming, which are often perceived as carrying higher financial crime risks. Having worked with these sectors extensively, Lidion’s Financial Crime Compliance team is well equipped to assess transactions, verify source of funds and identify genuine risks, enabling legitimate businesses to be onboarded efficiently while ensuring every relationship remains within the Bank’s risk appetite.

Operating from Malta while serving an international client base also gives Charmaine a unique perspective on how the country’s financial services landscape has evolved. Rather than seeing Malta’s greylisting as a setback, she believes it became an important turning point that strengthened the jurisdiction.

“I think the greylisting helped Malta address the gaps that were there, and now we’ve come out stronger,” she reflects. “Regulation has improved, expectations have improved, and international businesses are increasingly familiar with Malta as a reputable financial centre and understand the regulatory obligations that come with operating here.”

That progress is reinforced by a collaborative culture across Malta’s financial services sector. Through industry associations, training events and regular discussions with fellow MLROs and Financial Crime Compliance professionals, knowledge and experience are continually shared to help the industry respond to emerging threats. “Malta is small and the MLRO and FCC professionals all know each other,” Charmaine explains. “It enables us to have quite open conversations and keep on top of everything.”

As AI continues to reshape financial crime, Charmaine believes the future won’t be defined by technology alone, but by how effectively people use it. While AI is helping banks identify suspicious activity faster and automate routine processes, she believes that ultimately cannot replace the experience and judgement needed to interpret risks and make informed decisions.

“It’s not easy to balance. You have to be on the ball all the time. And that means understanding how systems work, analysing alerts, reducing false positives and continually assessing whether new technologies are delivering meaningful results. Although I’m the Head, I have to keep getting my hands dirty and understanding the systems we have in the Bank. So that human element will remain, but now we’re using the human element in a better, more efficient way,” she concludes.