In this episode of HFS Unfiltered Stories, Divya Iyer, Practice Leader at HFS Research, is joined by Tom Scazzafavo, Global Financial Crime Managed Services Leader, EY, for a candid look at why financial crime compliance keeps failing to deliver, and how AI is changing the equation. The conversation follows EY's recognition as a Horizon 3 Market Leader in the HFS Horizons Financial Crime Compliance Services 2026 report. Tom's diagnosis is pointed: institutions have poured money into compliance for over a decade, yet enforcement actions haven’t fallen, because the investment was incremental rather than transformational. Firms layered new tech on fragmented processes, legacy systems, and inconsistent data, so spending rose while the operating model never changed. He traces it to three root causes: data trapped in silos, inefficient manual processes, and incentives that reward throughput over real risk reduction. Tom is clear-eyed about AI's reality, too, separating where it genuinely works today (alert reduction, entity resolution, and network analytics, and generative AI that speeds investigations) from where ambition outruns reality (fully autonomous decisioning and scaling across jurisdictions). His verdict: AI is powerful, but it's no silver bullet, and humans stay in the loop for a while yet. He shares EY's “AI trust and governance” approach, treating each agent like a customer in a KYC process, and closes with a sharp look ahead: criminals adopting AI as fast as institutions through synthetic identities and deepfakes, the rise of real-time payments and digital assets, and widening cross-border regulatory divergence. The through-line: financial crime is becoming faster and more networked, and the winners will be those who move to real-time, intelligence-led compliance. Learn more about the 2026 HFS Horizons: Financial Crime Compliance (FCC) in Financial Services - covering 15 providers: https://www.hfsresearch.com/research/hfs-horizons-financial-crime-compliance-fcc-in-financial-services-2026/