The business of crime is having a field day deep inside of the world's interconnected financial system.

Or so reveal some shocking findings out of the Nasdaq stock exchange on Tuesday.

In 2023, more than $3 trillion in illicit funds flowed through the global financial system, according to Nasdaq's research. The breakdown: $782.9 billion in drug trafficking activity, $346.7 billion in human trafficking, and $11.5 billion in terrorist financing.

In addition, there were $485.6 billion in losses from a range of fraud scams and bank fraud schemes worldwide.

"Those are just staggering statistics," Nasdaq CEO Adena Friedman told Yahoo Finance Live at the World Economic Forum in Davos, Switzerland.

Nasdaq added that the figures only represent a "fraction" of the "true scope" of financial crimes from last year.

"The true scale cannot be accurately measured in numbers, given how much crime goes unreported by victims and undetected in the current financial system," the report went on to say.

The survey's findings mostly come from 209 anti-financial crime professionals from bank and nonbank institutions in North America, with assets ranging from $10 billion to over $500 billion.

Friedman pointed out that the financial system is at risk if the issue of fraud isn't properly addressed by financial institutions, the government, and other parties.

"A single bank, a single institution, cannot solve this problem. And law enforcement alone can't solve it either," said Friedman. "So it has to be a public-private partnership. It has to be that the banks work together. They share information so that they can actually tackle the problem together and that they also work very closely with law enforcement."

Given the scope of the problem, Friedman — head of Nasdaq since 2017 — has sought to reposition the stock exchange from solely being a destination to list and trade tech stocks to being one that helps institutions address fraud.

In 2020, Nasdaq purchased anti-financial crime software firm Verafin for $2.75 billion. The business has gone on to become a growth juggernaut for the company.

Verafin saw third quarter sales surge 29% from a year ago, amid the adoption of its fraud and anti-money laundering solutions amongst small and medium-sized banks. Existing clients also gave Verafin more business.

The company recently appointed Brendan Brothers as head of its new anti-financial crime unit. Brendan Brothers is a co-founder of Verafin.

"Verafin has been a home run," said JPMorgan analyst Michael Cho in a client note seen by Yahoo Finance. "While the competitive environment is always a consideration, Verafin has been winning market share from competitors as well as displacing internal systems in further penetrating the market."

Read the latest from the World Economic Forum in Davos, Switzerland:

• IMF managing director on AI's impact: New social safety nets may be needed

• IMF managing director Kristalina Georgieva on crypto: It's not money

• Microsoft co-founder Bill Gates on AI's impact on jobs: It's great for white-collar workers, coders

• Generative AI is miracle technology for profit-hungry CEOs: PwC survey

• 'Sheer panic' from European leaders on potential second Trump term: Ian Bremmer

• PepsiCo CEO on leadership, ultra-processed foods, and weight-loss drugs

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].

Click here for in-depth analysis of the latest stock market news and events moving stock prices.

Read the latest financial and business news from Yahoo Finance