Human trafficking transaction detection needs a bigger financial crime toolkit

Firms seeking to detect transactions linked to human trafficking and other forms of exploitation require a bigger financial crime toolkit. Some transaction patterns and typologies might be familiar to financial crime teams, but rooting out human trafficking and exploitation requires tools and training based on an understanding of how this kind of organised crime works as a business.

People smuggling has become a financial crime policy issue under the UK’s Labour government, in common with the US as it attempts to stop people entering through its southern border. Following the US’s example, the UK is seeking to introduce sanctions on human trafficking and people smuggling transnational crime groups.

Both countries have increased their scrutiny of money services businesses (MSBs). The UK stepped up engagement with hawaladars, who provide an informal means of transferring money, to raise awareness of abuse by people smuggling gangs. The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a geographical targeting order (GTO) in March requiring MSBs in California and Texas to file currency transaction reports (CTRs) for cash transactions starting at a $200 threshold.

While that order was targeted at drug traffickers, it was also seen as a move by the Trump administration to address people smuggling. In 2023, FinCEN published an alert on people smuggling on the southwestern US border.

Disrupting criminal networks engaged in human trafficking and smuggling is also a European Union priority. European law enforcement, including Europol, report that human trafficking and smuggling is one of most prevalent crimes in the EU. Europol has already concluded six operations targeting and arresting offenders in 2025.

The trafficking business

One point emphasised by law enforcement, charities and financial crime subject matter experts (SMEs) is the importance of understanding human trafficking and smuggling as a business as well as a crime. Europol characterises migrant smuggling as a criminal business that is “incessant and moves geographically according to demand, opportunities and/or obstacles” and involves a large number of criminal networks.

“Weʼve stopped looking at this just as a crime and started to try to understand the business fundamentals to sustain human trafficking,” said Neil Giles, president of the Traffik Analysis Hub (TA Hub) at UK charity Stop the Traffik.

Like other forms of organised crime, human trafficking — and the array of exploitative crimes it enables — needs access to financial systems to sustain itself, Giles explained: “It must have legitimate access to financial systems for all kinds of reasons. It needs to transport people, feed people, house people. It sometimes needs to invoice entities. It needs to move and access the ill-gotten proceeds of trafficking, and in doing so, it leaves a snail trail specific to the kind of trafficking that itʼs doing.”

Pallavi Kapale, a senior financial crime officer at Bank of China in London, said she first noticed a sharp rise in people trafficking and exploitation-related transactions during the Covid-19 pandemic, partly as people turned to online sex work for employment. At the same time, geopolitical unrest and wars in Ukraine, Syria, Yemen, and South Sudan have increased demand for migrant smuggling and attracted organised crime to what used to be an unprofitable business. Given the increased activity and political focus, the challenge for banks is operationalising a way to detect indicators in financial flows and transactions, she said.

“The problem for the banks is it’s such a wide typology, but they need to narrow it down to see how it can be flagged on the transaction monitoring system. That is a bigger challenge: how can we do it?” Kapale added. “Currently, I’m thinking about that problem myself. What rules should I be putting on the transaction monitoring system to say this is a part of migrant smuggling?”

Behavioural patterns

Transaction monitoring systems will not necessarily flag up transactions as a human trafficking or migrant smuggling case because typologies are generalised. It is up to financial crime SMEs to dig into the account to reveal what kind of crime might be occurring.

“Until you review the entire account and you try to understand what is actually happening in this account, you’re not going to see human trafficking. When you start digging in and start seeing more stuff, you can see this is a part of something. Then you can raise a SAR [ suspicious activity report],” Kapale said.

Stop the Traffik’s TA Hub helps banks deal with this typology problem and to devise ways to be more effective at spotting trafficking and deciding how to respond. For example, one of its data sets is created from survivor narratives describing trafficking journeys, and the TA Hub uses artificial intelligence (AI) to discern patterns and create persona-based typologies of victims and perpetrators.

“It’s possible to come up with a series of identifying factors that indicate whether this is commercial or sexual exploitation associated with a pattern of payments,” Giles said.

A persona-based typology seeks to categorise and understand different types of people, organisations, and their characteristics involved in specific financial crime types. Instead of focusing solely on suspicious transactions or generic red flags, this approach builds detailed profiles or persona-based on real-world behaviours, roles and interactions seen in criminal networks. In human trafficking terms, this network would include traffickers, facilitators, victims and recruiters.

Industrial scale scraping

Many people are trafficked to be sexually exploited in prostitution or online, so TA Hub also monitors sites promoting these services to gather information that can help detect financial related transactions. The data feeds into its Exploit X tool.

“We are scraping industrial quantities of adult service websites around the world and then going through a risk scoring process with these to generate a set of personal identifiers — mostly cell phone numbers, but some IP addresses and some email addresses — that that we consider if you have a trace of in any of your platforms, itʼs worthy of highlighting them for a further look, for escalating them, for scrutiny and and running persona-based typologies across them,” Giles said.

Bank of Chinaʼs Kapale says in her experience, checking phone numbers is the first process that can pick up on human trafficking cases, particularly those linked to sexual exploitation. “They are either listed on a porn site or they are listed somewhere else, because at the end of the day, they need business and thatʼs how they want people to get in touch with them,” she said, making it the easiest way to check for human trafficking.

It is also important to keep an eye on card payments made to adult websites. Make sure to compile a list of retailers within your transaction monitoring system to enhance oversight, she added.

Telltale sites and signs

Phone numbers showing up on websites such as OnlyFans, and other so-called freelancing websites such as awork.com are common indicators of people trafficked for sexual exploitation, according to Kapale. Meanwhile, payments to lingerie websites such as Viva Street can also be signals of potential trafficking and exploitation.

Europol notes that “migrant smuggling is, for a large part, inherently a physical cross-border crime” and digital and technological developments have accelerated it and will continue to do so. Human traffickers use online platforms for marketing, recruitment, communication and money transfers. Europol says migrant smugglersʼ misuse of online applications to plan journeys and to advertise successfully completed journeys.

Human trafficking cases often show payments to cheap bus, short-term letting and ferry services, Kapale said.

Furthermore, job advert websites are often used to target people and pre-traffick them, Giles said. Pre-trafficking refers to the practice of psychological coercion associated with grooming vulnerable people to be trafficked for sexual and labour exploitation.

Raising SARs

Kapale was trained to identify human trafficking-related transactions while at Barclays and carried that knowledge with her to other financial crime roles. She worries that not enough financial crime teams are trained to understand the typologies and file SARS to the NCA’s Financial Intelligence Unit (FIU).

“Usually, these accounts only hold very tiny amounts. The money always flies out very quickly and hardly anything is left. Banks are very, very slow in processing as well, and [the traffickers] are very fast. At end of the day, you are just filing the SAR to tell the NCA we have had human trafficking. We are exiting the customer,” Kapale said.

The NCA rarely, if ever, gives feedback on human trafficking SARs, she added, although it has issued several alerts about the crime in its Sars in Action newsletter.

Stop the Traffik’s Giles said the FIU is not going to investigate a SAR unless it chimes with other data, or in some way is a massive priority, as it just does not have the resources. “The problem has been historically, particularly with UK banks, that because the sums of money tend to be not at drug trafficker levels, they just offboard these people rather than issue SARs. We’re on a journey to try to get them to look at this differently,” he added.