India's financial sector has set up an industry-led platform to strengthen anti-money laundering (AML) and combating the financing of terrorism (CFT) frameworks, as regulators and market participants grapple with increasingly sophisticated financial crimes, cyber fraud and risks emerging from digital assets.The newly launched Alliance of Reporting Entities in AML/CFT (ARIFAC) will serve as a common platform for banks, non-banking financial companies (NBFCs), payment firms, insurers, securities market intermediaries, virtual digital asset service providers and other entities covered under the Prevention of Money Laundering Act (PMLA).Moreover, the Financial Intelligence Unit-India (FIU-IND) is set to participate in the initiative as an observer.The alliance, whose secretariat will be jointly managed by the Payments Council of India (PCI) and the Fintech Convergence Council (FCC), aims to foster greater coordination among reporting entities, improve compliance standards and strengthen institutional capabilities to combat financial crime."The platform aims to promote knowledge sharing, improve compliance standards, enhance institutional capabilities, and support India's efforts to combat financial crime while strengthening the integrity of the financial system," said a press release.Focus on training, sanctions and digital risksThe formation of ARIFAC comes at a time when financial institutions are facing growing challenges from cyber-enabled fraud, money laundering networks, terrorist financing, sanctions evasion, mule account activity and the rapid expansion of digital asset markets.The platform will focus on five key areas, including capacity building through training and certification programmes, promoting cross-sector collaboration, facilitating engagement with regulators and enforcement agencies, developing industry-wide typologies and best practices, and representing India's reporting entity ecosystem at international forums.Industry-led working groups under ARIFAC will examine areas such as enhanced due diligence, sanctions screening, cross-border information sharing, mule accounts, digital banking risks and virtual digital assets.These groups are expected to formulate guidance frameworks, identify emerging typologies and recommend best practices for wider adoption across the financial sector.Industry bodies backing the initiative said the platform is intended to improve AML/CFT awareness and compliance maturity across institutions while helping align India's financial crime prevention framework with evolving global standards.