The Financial Conduct Authority’s latest review of money mule activity gives one of the sharpest views yet of how financial crime is changing across the UK’s regulated sector. It also raises uncomfortable questions for fast-growing FinTech firms.
The headline figure is striking. Suspected mule account offboarding at Electronic Money Institutions (EMIs) rose by 164.6% between 2024 and 2025, the steepest year-on-year jump of any firm category in the review.
According to SmartSearch, challenger banks were responsible for 33% of all suspected mule account offboardings, despite holding a relatively small share of the UK banking market.
These numbers do not necessarily mean digital-first firms are weaker. The FCA notes that many are growing their customer bases quickly, and that rising offboarding can reflect better detection rather than poorer controls. The more telling insight is what the data reveals about how criminal networks now move money.
Retail banks still handle most mule-related transactions by volume. EMIs, Payment Institutions (PIs) and challenger banks, however, tend to see fewer transactions with higher individual values. This suggests different institutions play different roles in the laundering chain. That challenges the assumption that one set of controls fits every business model.
Timing tells a similar story. According to the review, 74.1% of EMI account closures happened within six months of opening, compared with 56.9% for PIs.
Retail banks and building societies were more likely to flag suspicious behaviour in long-established accounts. Early detection is encouraging, but it also shows that criminals are actively targeting digital onboarding journeys at scale.
This is why onboarding checks alone are no longer sufficient. Customer behaviour, transaction patterns and ownership structures all shift over time.
Some mule accounts are used immediately, others lie dormant, and some change gradually. Continuous monitoring, behavioural analytics and ongoing due diligence are moving from supporting roles to primary defences.
The review also underlines the value of information sharing. Criminal funds typically pass through several institutions before leaving the system, so no single firm sees the full picture. Measures introduced through the Economic Crime and Corporate Transparency Act aim to help firms connect otherwise fragmented intelligence.
Scale is another pressure point. SmartSearch’s 2026 UK Compliance Reality Check found that only 30% of regulated firms use, or plan to use, AI-assisted triage for sanctions and PEP screening alerts.
As customer numbers grow, so do alerts, and without smarter automation compliance teams risk being buried by volume. The same research found 52% of firms struggle with beneficial ownership verification across complex structures, a growing concern as business account offboarding rises.
The conclusion is clear. EMIs, PIs, challenger banks and traditional lenders face different versions of the same threat. Strong onboarding, continuous monitoring, intelligence sharing and adaptable controls must work together.
Read the full SmartSearch post here.
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
