PARIS, France: The misuse of informal banking networks by criminals has become a growing global problem, according to the Financial Action Task Force (FATF).

The international body, which works to combat money laundering and terrorist financing, has called on governments and businesses to take stronger action against professional networks that help criminals move and hide illegal funds.

FATF said informal money-transfer systems, including hawala and similar providers, are now widely used for criminal purposes. These networks allow money to be transferred through agents instead of traditional banks and other regulated financial institutions.

"Underground banking and HOSSP-based money laundering have become increasingly professionalized, with some operating like sophisticated businesses."

Such systems were once mainly associated with laundering cash generated through crimes such as drug trafficking and smuggling. FATF said their use has now expanded significantly, with criminal groups using them to move money linked to fraud, cybercrime, terrorist financing, illegal gaming and gambling, and organized crime across borders.

The report also warned that professional service providers can play a role in these operations. Lawyers, accountants, auditors, consultants and real estate agents were among those identified by FATF member countries as potentially helping criminal networks carry out or hide illicit financial transactions.

Technology has also made informal banking networks more difficult to detect. Encrypted communications, financial technology, tools that protect users' identities, and the growing use of cryptocurrencies have changed how these underground systems operate.

According to FATF, these developments can allow criminal networks to move money more quickly while making transactions harder for authorities to trace.

The organization said some underground banking and money-laundering networks had become highly organized and professional. Rather than operating as loose criminal groups, some now function more like sophisticated businesses, with specialized services designed to help clients move and conceal illegal money.