The FCA's AML Obligations
The FCA supervises approximately 20,000 firms for AML compliance. Its key expectations include seven core obligations:
FCA 2026 Priorities
According to Browne Jacobson's analysis, the FCA's anticipated priorities for banks in 2026 include:
- Financial crime remains a core priority — continued focus on AML frameworks, sanctions compliance, and fraud prevention.
- Intelligence-led supervision — enhanced data analytics to identify firms with weak controls before enforcement action is needed.
- Material AML deficiencies as governance failings — significant AML control weaknesses treated not just as compliance failures but as failures of senior management governance, increasing personal liability under SM&CR.
- Intensified scrutiny — more frequent supervisory visits, data requests, and thematic reviews focused on financial crime.
The FCA will treat material AML deficiencies as governance failings — increasing the risk of personal liability for senior managers under SM&CR. This is not just about the firm; it is about individual accountability.
FATF: The Global Standard
The Financial Action Task Force (FATF) sets the global standard for AML/CFT with 40 recommendations across more than 190 countries. Key recommendations relevant to banking:
| Rec. | Topic | Key Requirement |
|---|---|---|
| R1 | Risk Assessment | Countries and financial institutions must identify, assess, and understand their ML/TF risks and apply a risk-based approach |
| R10 | Customer Due Diligence | Verify customer identity, identify beneficial owners, understand purpose and nature of the business relationship, conduct ongoing monitoring |
| R11 | Record Keeping | Maintain transaction records and CDD information for at least 5 years after the relationship ends |
| R18 | Internal Controls | Implement AML/CFT programmes including compliance management, employee screening, an independent audit function, and ongoing training |
| R20 | Suspicious Transaction Reporting | Report promptly to the national FIU when funds are suspected to be proceeds of crime or related to terrorist financing |
Additional relevant recommendations:
| Rec. | Topic | Key Requirement |
|---|---|---|
| R13 | Correspondent Banking | Enhanced due diligence for cross-border correspondent banking relationships |
| R15 | New Technologies | Assess risks from new products, business practices, delivery mechanisms, and virtual assets |
| R16 | Wire Transfers | Collect and transmit identifying information from originators and beneficiaries in wire transfers |
| R19 | Higher-Risk Countries | Apply enhanced due diligence for business relationships and transactions from/in higher-risk countries |
UK FATF Compliance Status
The UK's most recent FATF Mutual Evaluation rated it as (FATF):
The next Mutual Evaluation is scheduled for 2027.
February 2025: Changes to R1, R10, and R15 to promote financial inclusion while maintaining AML standards. June 2025: Updated R16 (Payment Transparency) with new requirements effective by end of 2030.
Knowledge Check: FCA & FATF
Answer all 5 questions to unlock the next module.
Under the FCA's requirements, which role must every regulated firm appoint?