The UK is undergoing a fundamental shift in its approach to financial crime regulation, with 2025 marking a turning point. Regulators are moving away from a reactive, box-ticking model and embracing a proactive framework built around data, judgment, and resilience.
According to RelyComply, at the centre of this change is the concept of “impactful deterrence”, where quality rather than quantity defines enforcement. For compliance leaders, the challenge is to align with this new paradigm by embedding robust governance, cultural integrity, and advanced data systems into their organisations.
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have both outlined strategies that reshape their role in supervising firms. The FCA’s 2025/26 work programme and its broader strategy through to 2030 emphasise becoming a smarter regulator, fostering growth, supporting consumers, and tackling financial crime. This includes major investment in digital capabilities, particularly in intelligence and data-led supervision. Firms able to demonstrate effective data governance may benefit from lighter oversight, while those reliant on outdated systems face heightened scrutiny.
For the PRA, the 2025/26 business plan maintains its core objectives around banking and insurance safety but also advances a new priority on competitiveness. A key element is operational and cyber resilience, with new policies under consultation and testing planned to assess firms’ ability to withstand sophisticated cyber threats. This agenda links directly to financial crime prevention, as technological vulnerabilities are increasingly exploited by criminals. The Barclays fine for poor account-opening procedures is a stark reminder of how weak systems can facilitate illicit activity, underlining the need for joined-up collaboration between compliance, IT, and risk teams.
Legislative reforms are also reshaping compliance expectations. HM Treasury’s draft amendments to the Money Laundering Regulations narrow Enhanced Due Diligence obligations to “FATF call for action countries” and focus on unusually complex or large transactions. This approach demands stronger internal judgment and defensible frameworks, moving away from blanket application of rules. At the same time, the FCA’s new rules on non-financial misconduct, effective from 2026, broaden oversight to include workplace culture. Misconduct such as bullying or harassment will now be treated as regulatory breaches, reinforcing the connection between internal culture and wider control environments.
Enforcement trends confirm this move towards impactful deterrence. FCA data shows fewer open investigations but significantly higher penalties. The Barclays case exemplifies the risks of systemic failings, with fines totalling £42m after the bank failed to manage money laundering risks and respond appropriately to law enforcement warnings. This highlights how regulators are prioritising systemic cases with industry-wide implications.
Globally, the UK’s reforms are aligned with international standards. Updates to FATF’s Travel Rule and the launch of the EU’s new Anti-Money-Laundering Authority (AMLA) are shaping expectations across borders. While AMLA has no direct jurisdiction over the UK, its standards will set benchmarks that UK firms with European operations cannot ignore. This global context means horizon scanning and international compliance planning are critical.
For compliance leaders, the message is clear: reactive approaches are no longer sufficient. Firms must invest in data infrastructure, redefine their risk-based frameworks, integrate cultural governance, and anticipate global regulatory changes. Those that succeed will not only mitigate enforcement risks but also strengthen their competitiveness in an evolving financial landscape.
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