Government promises end of tick-box AML: Decoding the UK’s anti-money laundering and asset recovery strategy 2026–2029 

The government has set out a significant change of direction for the UK’s anti-money laundering regime, with a greater focus on risk and intelligence. Supposedly, the outcomes will deliver a reduced emphasis on compliance activity that delivers little practical value.

Published on 15 September, the Anti-money laundering and asset recovery strategy 2026–2029 sets out the government’s AML priorities for the next three years. Its three pillars are “Target, Integrate and Empower”: concentrating resources on the highest risks, improving the way information is shared across the system.

For businesses, one sentence in the strategy is particularly significant. The government says that despite substantial investment in AML, too much private-sector activity remains focused on low-value “tick-box” compliance, while tools and training have struggled to keep pace with evolving threats.

That does not mean AML requirements are about to disappear. Nor does it give firms licence to abandon existing controls. Many of the changes in the strategy still require consultation, legislation or further policy development. 

However, this strategy does tell us what kind of AML system the government wants to build: more risk-based, more technologically enabled and more closely connected to real intelligence about financial crime.

A stronger push towards genuinely risk-based AML

Perhaps the clearest theme running through the strategy is an attempt to distinguish valuable AML work from compliance activity performed largely because the rules require it.

The government wants firms and supervisors to devote more resources to the people, transactions and activities presenting the highest risks, while identifying requirements and processes which contribute little to preventing money laundering. It describes future supervision as more “intelligence-led and outcomes-focused”, with firms supported to make proportionate, risk-based decisions rather than applying blanket controls.

Some movement in this direction has already happened. The 2026 changes to the Money Laundering Regulations give firms greater scope to take a risk-based approach when applying enhanced due diligence to high-risk jurisdictions, as mandatory EDD for FATF grey-listed jurisdictions was dropped.

Further changes are now planned. HM Treasury intends to consult again on the MLRs with the specific objective of reducing low-value activity and improving proportionality. The government wants the regulations to focus firms’ resources on “meaningful suspicion rather than low-value compliance”, including reducing unnecessary friction in financial and legal services.

This makes the quality of risk assessment increasingly important. A risk-based regime still requires controls. Firms need to be able to explain why particular customers, matters or transactions receive a particular level of scrutiny and demonstrate that their approach reflects relevant risks rather than convenience or cost saving.

Training will need to follow the same principle. An annual AML course which simply walks employees through rules and definitions is less useful in an environment where regulators increasingly expect individuals to recognise risk indicators, exercise judgement and escalate genuinely suspicious activity.

Fewer low-value SARs, with greater emphasis on useful intelligence

The same philosophy is being applied to suspicious activity reporting. According to the strategy, there were 866,616 SARs submitted to the UK Financial Intelligence Unit in 2024–25. The government is now examining whether the volume of reporting includes too much activity of limited intelligence value. It will review the SARs regime and specifically consider whether the statutory suspicion threshold under the Proceeds of Crime Act should be raised, with “reasonable grounds to suspect” given as an example of a possible alternative. No change to the threshold has yet been made.

This sits alongside a much broader attempt to make better use of the information firms already provide. A new National Financial Intelligence Service (NFIS) will sit within the NCA, supported by the FCA and overseen by a public-private board. It is intended to bring together existing public-private financial intelligence capabilities, use AI to analyse large datasets and improve how quickly useful intelligence reaches law enforcement and private-sector partners.

Initially, much of this work has focused on the financial sector. The strategy explicitly identifies legal services, accountancy, gambling and insurance as sectors which could become more closely integrated into the national financial intelligence system. A review of how this could work is due during the first year of the strategy.

The SARs infrastructure itself is also being upgraded. The government plans to complete the SARs Digital Service and expand the UKFIU’s analytical capability, including stronger feedback to SAR reporters on matters such as poor-quality reports and sectoral reporting trends.

Supervision is becoming more targeted, with potentially stronger enforcement powers

The strategy also continues the restructuring of AML supervision. The government has already decided that the FCA will eventually take over AML supervision of legal, accountancy and trust and company service providers. The transition will take several years, and existing supervisors remain responsible in the meantime. The primary legislation enabling the change is contained in the Financial Services and Markets Bill, which is currently proceeding through parliament.

HM Treasury intends to consult on strengthening enforcement powers under the MLRs. Options include wider powers for supervisors to conduct unannounced visits and search premises for cash, stronger mechanisms for holding directors accountable for MLR breaches, and changes to which authorities can prosecute breaches.

The government also wants more consistent supervisory risk assessments. Supervisors would work from common principles and make greater use of intelligence from law enforcement and SARs to identify the risks affecting particular regulated activities.

At the same time, professional enablers remain a priority. The strategy proposes further consultation on powers targeting the highest-harm professional enablers associated with hostile states and corrupt elites, potentially including restrictions on an individual’s ability to provide particular services or operate within a profession. These are proposals rather than existing powers.

AI, digital identity and better data are moving into mainstream AML compliance

Technology appears throughout the strategy both as a new source of risk and as part of the proposed solution. The government identifies AI, fintech and privacy-enhancing cryptoassets among the areas changing the money laundering threat. At the same time, it wants firms and supervisors to use technology more effectively to reduce unnecessary compliance work.

Digital identity is one example. Government guidance published in February 2026 already addresses the use of digital identity providers as reliable and independent sources of information for customer due diligence. HM Treasury and the Department for Business, Innovation, Science and Trade will now consider whether further measures are necessary to encourage digital ID use for AML checks.

AI is also moving further into the supervisory agenda. The FCA is expected to publish examples of good and poor practice in the use of AI for AML during 2026–27 and update its Financial Crime Guide with examples covering AI and information sharing. HMRC and the Gambling Commission are also expected to encourage appropriate use of technology while monitoring whether firms are applying genuinely risk-based controls.

Companies House data is another focus. The government plans to review the discrepancy reporting regime, which requires firms to compare certain information discovered through due diligence with Companies House records. The strategy acknowledges that the current system can generate high volumes of low-value reports and proposes updated guidance, a wider review and improved public-private information sharing.

Taken together, these reforms suggest a move away from AML processes built primarily around collecting and checking documents. Future systems are likely to make greater use of verified digital identity, connected datasets, automated analysis and intelligence from across the regulated sector. Human judgement will remain critical, particularly where technology generates alerts or informs decisions affecting whether a customer is accepted, investigated or reported.

What should firms do now?

Firms do not need to redesign their AML programmes in response to the strategy today. The strategy is a three-year policy programme, and many of its more consequential measures still require consultation or legislation.

However this strategy sets out what the government plans to do around AML for the duration of this parliament. It can be useful to assess your existing processes against future planned changes and understand where the gaps in your existing processes may be.

Training should increasingly reflect emerging risks and realistic decision-making rather than treating compliance as a sequence of boxes to be completed. Firms should also expect technology, data quality and information sharing to play a larger role in AML compliance over the next several years.

Further detail will emerge across these key areas over the next few years. There will be many consultations and planned changes to keep track of, but the important thing to remember is that the underlying AML obligations remain as they are. When things do change, VinciWorks will be here to update you, and ensure your AML training remains up to date.

Summary of proposed changes from the 2026-2029 strategy