AML reform is accelerating: what firms should take from the UK’s 2026–2029 strategy

The most significant reform is the proposed transfer of AML supervision for legal, accountancy and trust and company service providers to the FCA. This would reduce the number of AML supervisors from 25 to three and materially change the supervisory environment for firms currently supervised by professional bodies. Boards, MLROs and compliance teams should start assessing whether their AML governance, controls, monitoring and senior management oversight would withstand FCA-style scrutiny.

The Government intends to consult on strengthening supervisory powers under the Money Laundering Regulations, including powers to conduct unannounced visits and to hold directors personally accountable for MLR breaches. AML compliance is increasingly becoming a senior management issue, not merely a compliance function responsibility. Firms should review whether their governance, escalation and accountability frameworks are sufficiently robust.

Despite reforms introduced in 2025, SAR volumes remain exceptionally high. The Government is exploring whether the legal test for SAR reporting should move from suspicion to a higher 'reasonable grounds to suspect' threshold. If adopted, this could be one of the most significant changes to the SARs regime in recent years. Firms generating high SAR volumes should monitor developments closely and consider engaging with any consultation process.

The Government plans further consultation on reducing unnecessary compliance burdens and targeting the Money Laundering Regulations more effectively at genuinely high-risk activity. This may create greater flexibility for firms that can evidence a mature risk-based approach, but it is also likely to increase scrutiny of whether controls genuinely reflect risk rather than simply satisfy procedural requirements.

Several sectors currently outside the Money Laundering Regulations are under consideration for future inclusion, including property developers, offshore virtual asset service providers, football clubs and agents, antiques dealers and donation-based crowdfunding platforms. This is a notable acknowledgement that economic crime risks are not confined to regulated financial activity. Businesses in potentially affected sectors should consider whether they are exposed to money laundering or reputation laundering risks, and what AML framework, governance arrangements and compliance resources they would need if the perimeter is expanded.

The strategy identifies crypto-enabled money laundering as a growing threat and highlights significant investment in law enforcement capabilities to identify, disrupt and recover criminal assets. Cryptoasset firms, particularly those involved in stablecoins, should expect closer scrutiny of monitoring, customer due diligence, investigations and suspicious activity reporting. They should ensure they can evidence controls that are both robust and effective.

A new National Financial Intelligence Service (NFIS) will be established within the NCA to strengthen public-private collaboration and improve understanding of illicit financial flows. The model is expected to extend beyond traditional banking partnerships to a wider range of sectors, including cryptoasset businesses, electronic money institutions, legal services and accountancy firms. Firms should anticipate more structured intelligence-sharing engagement.

The Government intends to give the UKFIU stronger information-gathering powers, including the ability to compel information from industry without court approval. It is also exploring powers to suspend transactions in response to domestic or international law enforcement requests. Firms should test whether their existing procedures would support rapid responses to compulsory information requests or transaction interventions.

The Government believes significant volumes of criminal money continue to be laundered through high street businesses and has committed dedicated funding to increase enforcement activity. This is likely to result in more inspections, investigations, arrests and asset seizures. Businesses in sectors considered vulnerable to abuse should expect increased scrutiny from both law enforcement and supervisors.

The Crime and Policing Act 2026 introduces what the Government describes as the most substantial reform of the confiscation regime since its creation. The reforms are intended to improve efficiency, strengthen support for victims and make complex asset recovery cases easier to pursue. The expansion of civil forfeiture powers to additional asset classes is also expected to increase the practical recovery options available to enforcement agencies.

The strategy recognises that artificial intelligence presents both opportunities and risks in the fight against financial crime. The FCA is expected to publish examples of good and poor practice relating to AI. Firms using AI within onboarding, screening, transaction monitoring or investigative processes should ensure they can demonstrate appropriate governance, oversight, testing and accountability before regulatory expectations develop further.