The UK’s AML framework has undergone meaningful change in 2025, with policymakers introducing new processes aimed at strengthening accountability, closing long-standing gaps, and improving how organisations manage financial crime risk.
According to SmartSearch, these reforms reflect growing regulatory concern around complex ownership structures, evolving fraud typologies, and the role of technology in preventing illicit activity. For regulated firms, the message is clear: AML compliance is becoming more risk-focused, more transparent, and more closely scrutinised.
At the heart of the 2025 reforms are updates to the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Draft amendments published by the government seek to modernise customer due diligence requirements and push firms to move beyond box-ticking exercises.
The emphasis is increasingly on how well organisations understand their risks, how effectively they identify gaps in knowledge, and how proactively they prevent exposure to new financial crime threats. For many businesses, this means reassessing onboarding workflows and ensuring risk assessments are continuously refreshed rather than reviewed periodically.
Greater transparency around company and trust ownership is another defining feature of the new AML landscape. Changes linked to the Economic Crime and Corporate Transparency Act (ECCTA) have expanded the powers of Companies House, introducing stronger identity verification checks and greater authority to request information. These measures are designed to make it harder for individuals to conceal beneficial ownership through complex trust or property structures, particularly those involving overseas assets. For financial institutions, easier access to ownership data supports more robust due diligence while reducing the reputational risks of unknowingly engaging with opaque entities.
The ECCTA has also introduced a major shift in corporate liability. From September 2025, “failure to prevent fraud” became a criminal offence for larger organisations. This change significantly raises the stakes for boards and senior management, as firms can now be held accountable where fraud occurs and reasonable preventative measures were not in place. Combined with tougher enforcement expectations, this reform is pushing organisations to revisit staff training, internal controls, and the effectiveness of their AML and fraud prevention frameworks.
Regulatory oversight has also evolved. The Financial Conduct Authority has taken on a greater supervisory role over certain professional bodies, including legal firms. This move aims to deliver more consistent AML supervision and address weaknesses that have historically allowed risks to go undetected. With new reporting expectations emerging, firms must ensure their compliance teams are aligned with the FCA’s evolving approach to supervision and enforcement.
Crypto-asset businesses and FinTech firms have not been overlooked. Amendments to the Financial Services and Markets Act have strengthened requirements around ownership transparency, Persons of Significant Control, and ongoing reporting obligations. As crypto-related fraud continues to rise, regulators are paying closer attention to governance structures and operational accountability within the sector.
For businesses, these AML changes mean action is required. Firms are expected to update customer due diligence and risk assessment processes, apply more rigorous Companies House checks, review fraud prevention measures in line with ECCTA expectations, and ensure crypto-related activities meet new regulatory standards. Ultimately, staying compliant in 2025 is about demonstrating capability, not just meeting minimum requirements. Tools that support real-time identity verification, ongoing monitoring, and dynamic risk management are becoming essential rather than optional.
Source - https://fintech.global/2026/01/06/how-2025-aml-cha...