Money laundering is a massive threat. The financial sector can help prevent it.

Money laundering is the process of converting funds obtained through illegal activities into clean cash. This type of crime hurts society because it robs public coffers and deprives citizens of revenues that could fund better public services. And it has devastating consequences for the economy, society and our security.

Most people associate money laundering with activities such as drug dealing, prostitution and gambling. But those are just its most recognized facets. A multitude of illicit activities, such as terrorism, arms dealing, sex trade, government corruption, organized crime and human trafficking are also connected to financial crime.

Its magnitude is enormous: It represents a staggering 2 percent to 5 percent of the global GDP, or roughly $1 to $2 trillion annually, according to the United Nations Office on Drugs and Crime. Only a small fraction of that is apprehended by authorities. To put that in perspective, Canada, one of the world’s 10 largest economies, had a 2016 GDP of $1.5 trillion, according to the World Bank.

Money laundering is closely associated with the financial sector. And that’s why professionals in banking and finance must be vigilant and trained with the latest tools available to combat financial crime.

In the past few years, there have been a spate of headlines involving money laundering in South Florida. Among them: the illegally mined gold scheme, in which a Miami-based company aided Latin American drug lords to smuggle the precious metal into the U.S.; the corruption charges that led to the downfall of the mayor of Hallandale Beach; and the Miami-based couple accused of running a sophisticated human smuggling ring. All relied on money laundering to legitimize their financial operations. Over the years there have been numerous other high-profile cases — many with strong South Florida and Latin American ties — that involved well organized money-laundering plots, including Bernard Madoff and the FIFA scandal.

Because criminal organizations rely on financial institutions to launder and move funds around the world, banks and other financial services firms are subject to very strict anti-money laundering (AML) regulations. These financial institutions collaborate closely with government agencies and spend hundreds of billions of dollars to detect and report suspicious activities. The number of compliance personnel has continued to grow, and the technology has advanced.

Yet, the struggle against financial crime continues more intensely than ever. And this is why we must increase our focus.

AML efforts are being shaped by challenges from increasingly sophisticated criminal organizations and an ever-changing compliance landscape. And with a globalizing economy, financial systems are becoming more interconnected, with an increasing volume of transactions moving around the world.

Added to the challenge: Financial crime legislation can vary greatly from country to country, so criminals flock to regions where they have a greater chance of avoiding detection — countries with the weakest money-laundering laws, such as many developing economies.

Also, money laundering has benefited from technology and has grown with it. New payment methods (including cryptocurrencies) and increasingly automated customer interactions, combined with larger volumes of financial transactions add to the challenge of preventing money laundering.

These are formidable challenges. But we have the power to overcome them. Every banking professional must take responsibility and stay abreast of the risks posed by financial crime to better prevent it, including the following basic actions:

▪ Understand their customers by conducting rigorous due diligence.

▪ More swiftly report suspicious activities to authorities.

▪ Undergo frequent training to stay current with best practices and latest technologies.

If financial sector professionals follow these ground rules, we have a real chance of preventing financial crime and eradicating the perpetrators behind it.

David Schwartz is president and CEO of the Florida International Bankers Association (FIBA).