The UK is set to reshape its approach to anti-money laundering (AML) over the next three years, with a new government strategy calling for greater use of intelligence, data and technology to tackle financial crime.
The Anti-Money Laundering and Asset Recovery Strategy 2026–2029, published by the Home Office on 15 September, sets out plans spanning government, law enforcement, regulators and the private sector. Analysis from Zigram suggests the strategy could push financial institutions towards more data-driven and technology-enabled approaches to AML compliance.
The government’s approach is organised around three areas: “Target”, which focuses resources on the highest-impact threats; “Integrate”, which aims to improve connections between financial intelligence and data; and “Empower”, which covers the skills, technology and capabilities required to disrupt money laundering.
For banks and other regulated businesses, the strategy represents a shift towards assessing the effectiveness of AML controls and how well they reflect individual risk profiles, rather than focusing solely on whether processes are being followed.
The government specifically points to large volumes of low-value compliance activity, such as excessive alerts, repeated investigations and unnecessary escalations, as creating pressure across the AML system. It wants firms and supervisors to become more effective at separating genuine risks from lower-value activity.
The supervisory framework is also due to change. More than 90,000 businesses currently fall within the UK’s AML and counter-terrorist financing regime, with the government planning to reduce the number of AML supervisors from 25 to three. The FCA is expected to assume responsibility for legal, accountancy, trust and company service providers.
The strategy calls for supervision to become more intelligence-led and outcomes-focused. This could place greater emphasis on firms demonstrating that their AML frameworks are appropriate for the risks they actually face.
The government is also reviewing the UK’s Suspicious Activity Report (SAR) regime. The UK Financial Intelligence Unit received 866,616 SARs in 2024–25, and officials will consider whether the suspicion threshold under the Proceeds of Crime Act should be raised. No immediate change has been made to existing reporting requirements.
One of the strategy’s central structural proposals is the creation of a National Financial Intelligence Service. The body would bring together the UKFIU, National Crime Agency, Joint Money Laundering Intelligence Taskforce, Data Fusion, law enforcement and private-sector partners.
Technology will play a larger role in this model. The government plans to deploy AI within the Data Fusion environment and develop APIs to support intelligence sharing. For financial institutions, greater interoperability could increase the importance of high-quality data across areas such as beneficial ownership, entity resolution, screening and network analysis.
AI and Digital ID are also identified as potential tools for making compliance more efficient. However, the strategy highlights the continued importance of explainability, validation and human oversight when deploying these technologies.
Cryptoassets are another area of focus, with the strategy addressing stablecoins, privacy-enhancing technologies and the seizure of cryptoassets. Crypto firms will be required to meet relevant AML requirements from 1 February 2027, while the FCA expects new regulated cryptoasset activities to enter its regulatory perimeter from 25 October 2027.
The strategy will be delivered over three financial years, with consultations and new capabilities planned for 2026/27, major reforms expected during 2027/28 and further implementation and evaluation in 2028/29.
As highlighted by Zigram’s analysis, the direction of travel places data, technology and intelligence at the heart of the UK’s next phase of AML reform, potentially changing how financial institutions design and demonstrate the effectiveness of their compliance programmes.
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