The Financial Conduct Authority (FCA) has highlighted the importance of effective financial crime controls as it steps up its work to tackle increasingly sophisticated threats across the UK financial sector.
In a recent update, Steve Smart, the FCA’s executive director leading its work on fighting financial crime, highlighted the growing scale and sophistication of financial crime and the role that new technologies and global connectivity are playing in changing the threat landscape.
The FCA is seeking to provide firms with greater insight into the methods being used by organised criminal groups, while making its expectations around financial crime systems and controls increasingly clear.
Money mule activity under scrutiny
One area receiving particular attention is money mule activity.
The FCA recently published the findings of its multi-firm review into money mule activity and cashing out, examining how criminals move and disguise the proceeds of fraud through networks of accounts.
The review found that FCA-regulated firms identified and closed 238,396 suspected money mule accounts in 2025, compared with 184,935 in 2023.
The FCA also found that fraud proceeds were typically cashed out after moving through between two and five mule accounts. Some accounts had been used repeatedly across different types of fraud, indicating the potential involvement of organised criminal networks rather than isolated misuse.
The regulator has told firms to consider these findings in the context of their own business models, customer bases and exposure to money mule risk, and to review and strengthen their controls where necessary.
Financial Crime Guide to be updated
The FCA has also confirmed that it intends to consult on proposed updates to its Financial Crime Guide.
The consultation will seek feedback from firms to ensure the Guide continues to provide a useful resource for strengthening financial crime systems and controls.
This comes alongside wider changes to the UK’s anti-money laundering supervisory framework. The FCA has begun setting out the risk-based, intelligence-led approach it intends to apply when it assumes responsibility for anti-money laundering supervision of the legal and accounting sectors.
Increased scrutiny of financial crime risks
The FCA is also taking action in areas where it has identified heightened risks.
This includes increased scrutiny of Annex 1 firms, following concerns about potential financial crime risks within the sector.
The regulator has warned that firms should not rely excessively on group-level controls or off-the-shelf procedures. Financial crime controls should instead be appropriate to the individual firm’s business, governance, operations and specific risk exposure.
The FCA has also warned consumers about the risks associated with some loan notes and mini-bonds, as part of its wider work to address risks to consumers and markets.
A coordinated approach to tackling financial crime
The FCA has stressed that effective action against financial crime requires cooperation between regulators, government, law enforcement and industry.
It is leading or supporting a number of actions under the government’s Anti-Money Laundering and Asset Recovery Strategy 2026–2029, which sets out the UK’s approach to disrupting money laundering and recovering criminal assets.
For regulated firms, the FCA’s latest activity reinforces the importance of maintaining financial crime frameworks that respond to changing risks rather than relying on static controls.
Firms should consider whether their risk assessments remain current, whether monitoring and detection controls reflect emerging criminal methods, and whether intelligence from across the business is being used effectively to identify and respond to suspicious activity.
What should firms consider?
Against the FCA’s increasing focus on financial crime, firms may wish to review:
- whether their financial crime risk assessments reflect current and emerging threats;
- the effectiveness and calibration of transaction monitoring and fraud detection controls;
- their approach to identifying and responding to suspected money mule activity;
- how financial crime intelligence is shared and used across the organisation;
- whether policies, procedures and controls remain appropriate to the firm’s individual business model and risk exposure; and
- whether testing and assurance provide sufficient evidence that controls are operating effectively.
The FCA will also host its Annual Public Meeting in Edinburgh on 6 October 2026, where Steve Smart is expected to answer questions on the regulator’s work to tackle financial crime.
How Neopay can help
Keeping on top of financial crime risks can be challenging, particularly as the methods used by criminals continue to change.
Neopay can help firms take a closer look at their existing arrangements, whether through an independent financial crime audit, practical training for staff or ongoing compliance support. Our aim is to help firms understand where their controls are working well and where there may be gaps that need attention.
If you would like to discuss your financial crime arrangements or find out how we can support your firm, please get in touch with our team.
