This past Thursday, October 23, Vinciworks held another in its successful series of AML core group meetings hosted and facilitated by the VinciWorks and Compliance Office team. These meetings have served to create a tight and powerful community of AML professionals in the world’s leading law firms. They have also become an opportunity for these professionals to come together to share ideas and best practices. 

AML Core Group meetings are by invitation only. Reach out here if you are interested in participating.

The October meeting of the AML Core Group brought together a select group of UK legal professionals to share best practices, hear the latest news, learn more about the hot topics of SARs, DAMLs and sanctions and discuss the most recent reforms to the Money Laundering Regulations and explore what they mean in practice.

FCA supervision? The legal sector holds its breath

The session opened with the breaking news that AML supervision for the legal sector could shift from the SRA to the FCA. Reactions were mixed, with concern outweighing optimism. Many feared the FCA’s data-heavy, enforcement-first approach could prove too rigid for smaller firms. One participant captured the mood: “The SRA, for all its flaws, understands access to justice. The FCA might not. The fear is that smaller firms will just stop doing regulated work.”

Others pointed to lessons from the claims management sector, where FCA oversight led to a “massive shrinkage” in the number of active businesses, an outcome few in the legal profession would want repeated. Still, some hope the change could finally bring consistency and clarity to AML supervision, addressing years of SRA inconsistency in enforcement. As Compliance Office founder and consultant Andrew Donovan noted, this isn’t what legal regulators expected. “Some parts of the market will be pleased to see the SRA not getting yet more powers,” he pointed out, “especially given recent questions around its performance in certain areas, but those of us familiar with the FCA also know that this could be going out of the frying pan and into the fire.”

Don’t miss our just-released guide: From the SRA to the FCA: What the Single Professional Services Supervisor means for your firm. Download it here.

Best practices forum

VinciWorks’ Business Development Director Tom Evans then led a rousing best practice AML forum in which participants raised their most burning AML questions and issues to the group, who provided engaging and valuable responses.

Among the issues discussed were how firms are balancing automation with human judgment in AML processes. A specific question posed by a participant was, “How are firms ensuring that automation supports but doesn’t replace human decision-making?”

Among the suggestions were that technology is improving especially with AI-driven monitoring but warned against overreliance on systems that generate too much bad data. Another participant shared how their firm is collaborating with Zapier to integrate AI screening into onboarding, allowing analysts to focus on higher-risk, higher-value work. “We’re using AI to enhance decision-making, not replace it. Every choice still rests on a risk-based approach.”

VinciWorks Omnitrack manager Ruth Mittleman-Cohen added a crucial compliance reminder: “Whatever tools you use, document your reasoning. The SRA wants to see human accountability in the record.”

Another timely question involved how to streamline AML onboarding without sacrificing quality. Participants noted that AI tools can help identify risks early, but workflows must still be tailored to practice area and risk profile. As one participant observed, “Private wealth isn’t corporate, and corporate isn’t litigation. Friction reduction means customisation, not uniformity.”

Compliance news roundup

A briefing on recent compliance news updates included:

• SRA’s July Sectoral Risk Assessment now highlights capital flight, misuse of client accounts, and changing business models. 
• National Risk Assessment reaffirms that legal services remain high risk for money laundering, particularly conveyancing, trusts, and client accounts. 
• Government consultation on MLR reforms continues, with a focus on “simpler and smarter” rules by early 2026. 
• Updated FCA PEP guidance stresses proportionality. Not all PEPs are high risk, and UK PEPs should generally be treated as lower risk. 
• The new failure to prevent fraud offence went live on September 1. It applies to large organisations but all firms should take note. Firms could be criminally liable if an employee or contractor commits fraud for the firm’s benefit and there were no reasonable fraud prevention procedures in place. 

Featured speaker: An MLRO perspective

This session of AML Core Group was excited to have Jonathan Grimes, partner at Kingsley, Napley as the guest speaker. Jonathan provided an overview of the key things to know about financial crime and sanctions, focusing on suspicious activity reports and DAMLs. 

Jonathan opened the session by unpacking the latest amendments to the MLRs. These included helpful clarifications on the “unusually complex” test for client work and revisions to the list of jurisdictions that trigger mandatory enhanced due diligence (EDD).

Although this list has been shortened to focus primarily on FATF “call to action” countries which are Iran, Myanmar, and North Korea, firms are reminded that EDD still applies wherever risk dictates. 

Jonathan discussed how to avoid money laundering offences by employing adequate consideration, consent defence of DAML and SARs and reasonable excuses. He discussed what qualifies as prejudicing an investigation and “tipping off” clients and what qualifies as terrorist financing offences. 

Breakout session: Changes to the UK Money Laundering Regulations

Led by Andy Donovan, the session focused on the government’s plan to take a close look at the current MLRs and consider whether they still make sense in today’s world. The idea was to simplify things but as Andy noted, everyone will likely be a little disappointed as to how much is likely to be achieved on that front. 

So, what’s actually going to change? The key proposed changes which will affect law firms are:

• Enhanced due diligence (EDD) threshold: EDD will apply to “unusually complex or unusually large” transactions. This is a change from “complex or unusually large”, but most already interpreted the legislation this way, with “unusual” being defined by the firm.
• EDD by jurisdiction: Mandatory EDD measures will only apply to countries on the Financial Action Task Force’s (FATF) “Call to action” list (currently Iran, Myanmar and North Korea). For FATF’s “Increased Monitoring” countries, firms must take a risk-based approach to EDD. These jurisdictions however, should not be ignored or considered low risk. EDD will still need to be considered with carefully documented reasons for why a lower level of EDD was carried out than previously may have been the case.
• Source of funds: Ongoing confusion remains around when to assess source of funds, especially in relation to ongoing monitoring and the requirement to consider them “where necessary” (outside of EDD requirements). No legislative change is proposed, but further guidance is expected. Watch for LSAG guidance updates and whether this will actually help firms.
• Pooled client accounts are to be made easier for banks to set up, but law firms may face tighter AML scrutiny, possibly increasing compliance burdens rather than easing them, particularly for those firms out of scope of the Money Laundering Regulations whose client due diligence processes may not be to the standard the banks may require. 

The main question for the breakout session was how should law firms be preparing for the changes now bearing in mind the reality of limited resources, especially when the final shape of the reforms is still uncertain. A lively discussion ensued.

As the meeting closed, participants were reminded of upcoming webinars:

• 29 October: Preparing for Tranche Two: Australia’s AML Reforms. Register here. 
• 12 November: The Latest on GDPR: Everything You Need to Know. Register here. 
• 26 November: Asia Pacific Compliance Trends. Register here. 

And of course, the next AML Core Group meeting on January 22, 2026

AML Core Group meetings are by invitation only. Reach out here if you are interested in participating.

As Tom noted, “It’s been quite a week in the world of AML. If nothing else, today’s session proves the importance of staying connected, and staying agile.”

In this volatile regulatory environment, the need for firms to adopt agile systems that can keep pace. This is why we developed Omnitrack, our workflow optimisation platform. It includes our AML Client Onboarding and Legal Compliance Suite solutions, all customisable to client process. Learn more here.