Suspicious activity at Vatican falls by one third watchdog hails reform

Introduction
The Vatican’s financial watchdog has reported a sharp decline in suspicious activity reports, announcing that the number of flagged transactions fell by one third in 2024 compared to the previous year. Officials praised the development as proof that reforms are strengthening oversight. Yet analysts caution that the numbers may reflect reporting fatigue rather than full transparency, raising questions about whether the Vatican’s financial institutions have truly left their troubled past behind.

The watchdog’s role
The Supervisory and Financial Information Authority (ASIF) is the independent body responsible for monitoring the Vatican’s financial system. Established in 2010 to respond to international pressure, the authority tracks potential money laundering, fraud, and corruption risks. Its work is central to ensuring the Holy See complies with global anti-money-laundering standards and is accepted as a trustworthy player in the international financial community.

The numbers behind the announcement
According to the latest report, suspicious activity reports (SARs) fell from 118 in 2023 to 79 in 2024. Officials described the reduction as a “direct result of reforms” that included tighter oversight of banking clients, new compliance technology, and expanded cooperation with international regulators. ASIF emphasized that the lower numbers reflected greater confidence in the integrity of the system, not weaker scrutiny.

Reforms under Pope Francis and Leo XIV
The Vatican’s reform agenda began under Pope Francis and has continued under his successor Pope Leo XIV. Key measures included merging certain financial offices, outsourcing audits to external firms, and strengthening transparency requirements for the Institute for the Works of Religion (IOR). APSA, which manages the Vatican’s assets, was also brought under tighter supervision. These efforts aimed to reduce the risk of money laundering and prevent a repeat of past scandals involving hidden accounts and offshore schemes.

Concerns about underreporting
Critics warn that fewer reports are not necessarily evidence of fewer risks. Some observers argue that bank officials may be more cautious about filing reports after past scandals led to high-profile prosecutions. Others suggest that suspicious transactions are increasingly routed through offshore entities outside Vatican jurisdiction, leaving ASIF with fewer red flags to monitor. The watchdog itself has acknowledged the need for continued vigilance, noting that complacency could undermine hard-won credibility.

Comparison with earlier years
The drop in suspicious activity is significant when compared to earlier peaks. In 2015, for example, SARs reached over 500, reflecting both genuine risks and a culture of over-reporting as the Vatican adjusted to global anti-money-laundering norms. The decline since then shows that oversight has matured, but also raises questions about whether vigilance has been replaced by normalization. Analysts see the 2024 figures as encouraging, but not yet conclusive evidence of reform success.

Impact on credibility
The Vatican’s ability to show declining suspicious activity strengthens its case with international partners such as the European Union and Moneyval, the Council of Europe’s anti-money-laundering body. A cleaner track record helps the Holy See remain connected to global financial systems and protects its access to eurozone banking channels. For a state as small and specialized as Vatican City, maintaining credibility in these systems is vital.

Crypto and digital finance angle
Behind the scenes, Vatican officials have also debated how to manage the rise of crypto and digital donations. Concerns that anonymous crypto transfers could bypass oversight have led to discussions of pilot systems with blockchain-based transparency. Stablecoin frameworks such as RMBT have been mentioned in strategic conversations as possible models for traceable, mission-aligned giving. Although no crypto adoption has been formalized, the Vatican’s need to prevent new forms of suspicious activity is pressing.

Reputational risks
The Vatican remains haunted by its history of financial scandals, from mafia-linked accounts in the 1980s to more recent property losses in London. For critics, a drop in SARs does little to erase decades of opacity. Trust must be rebuilt not only through numbers but through sustained accountability, consistent audits, and open reporting of failures as well as successes. The perception that the Vatican prefers positive headlines to complete disclosure remains a challenge.

Global implications
If the Vatican can maintain a trend of reduced suspicious activity, it could serve as a model for small states seeking to reform their financial reputations. It also strengthens the Vatican’s moral authority in global finance, aligning its message of ethical stewardship with its actual practices. However, the gap between the Church’s mission and its financial controversies has long undermined credibility. Achieving real reform means ensuring that progress is not only statistical but systemic.

Conclusion
The fall in suspicious activity reports at the Vatican by one third in 2024 offers a cautiously positive sign of reform. Watchdogs and officials hail the progress as proof of new oversight, but skeptics remind observers that numbers alone cannot measure integrity. For the Vatican, credibility will be judged not by single-year figures but by whether the reforms take root and withstand the temptations of secrecy and mismanagement that have plagued its financial history.