The FCA’s AML takeover: an accountant’s view on what you should do

Welcome to our new reality: it has been announced that the Financial Conduct Authority will oversee Anti-Money Laundering (AML).

This is the biggest shift in compliance in a generation. This will change the way AML is done every accounting firm in the UK.

Although professional bodies have voiced concerns, we must accept that the decision is final.

Now, as accountants, we must prepare.

How this happens: professional body matters

Let’s be honest, the professional body oversight system is struggling.

The latest report from the Office of Anti-Money Laundering Oversight (OPBAS) Professional Bodies confirms what many of us have suspected: no single professional regulatory body is “fully effective” in all areas.

That’s burdensome. But it doesn’t stop there.

What is more worrying is the inconsistent enforcement of the law. Amount of fine rejected even as supervisors identify more noncompliance. Over six months, there was a total of £98,870 in fines issued to 27 accountancy and tax advice firms. I consider it a slap in the face compared to the scale of the money laundering risks we are supposed to manage.

We also see professional bodies giving companies too much time to “fix deficiencies” rather than taking decisive action. I understand the collegial relationship between professional bodies and their members, but when it comes to fighting financial crime, collegiality cannot be more important than the rule of law.

What does the FCA’s takeover of AML mean to you?

The Financial Conduct Authority is not kidding around.

With the FCA taking over oversight of around 60,000 accounting, law and TCSP firms, the regulator will apply a financial services law enforcement mindset to your practice.

Let’s take a look at what our profession should anticipate.

1. Expect stricter enforcement

The FCA has a proven track record of large fines and strict oversight. Over the last decade (2015–2025), the FCA issued fines totaling £1.07 billion for 27 AML-related cases. The FCA issued its first fine to an audit firm in 2024: £15 million to PwC for failing to report suspected fraud.

That’s the culture that feeds into our profession.

2. Expect closer scrutiny

The FCA will use AI, machine learning and real-time data analysis to detect non-compliance. They will see patterns and target high-risk companies. This is different from industry associations, which are built to empathize with accountants’ daily challenges.

3. Expect sky-high standards

The FCA’s approach has never been soft. The focus is on preventing financial crime. Expect them to sue and also share the information they find with law enforcement agencies.

4. Estimated costs will increase

The FCA needs to expand its oversight of 60,000 firms and build expertise in the process. Someone has to pay for that infrastructure and learning, and it’s most likely us. Our professional body membership fees will not be lost; we may charge additional FCA oversight fees. A common concern is that this will have a disproportionate impact on smaller companies, and they will have to save more money to compensate.

What Don’t do we know?

Much more will be revealed in time; Major legislation is needed for the FCA to take over, and HM Treasury will consult on the FCA’s powers in early November.

Details include:

Timeline: No specific date has been set for implementation. This depends on parliamentary scheduling and could take 1-2 years.

Operational details: We need an indication of how existing AML processes will be transferred and whether current compliance efforts will be recognized.

Impact on small companies: There is still uncertainty about how burdensome the new regime will be for sole practitioners and small practices.

The current supervisor remains active until a change occurs. Expect them to be more decisive in taking action: OPBAS is pressing them to demonstrate effectiveness in this interim period.

However, nothing changes the fact that the FCA took over. That is for sure.

What’s the lesson?

The problem: we as accountants must be held to a higher standard. These high standards help stop crime.

The 2025 National Risk Assessment (NRA) confirms that accounting services are still at high risk of money laundering. Criminals specifically target our profession because we provide trust, legitimacy and access to the financial system.

This is increasingly complex with the emergence of fintech and crypto assets, evolving typologies, new high-risk countries, and increasingly complex money laundering schemes.

If the current system of professional bodies does not adequately capture non-compliance, it does not protect the reputation of the profession. Every accountant who unwittingly becomes a facilitator of money laundering harms us all.

A stricter and more consistent FCA regime could:

• Make sure all companies meet the same standards.
• Reduce reputational damage to the profession due to major failures.
• Provide more explicit guidance and expectations than the current fragmented system.
• Use technology to make monitoring more efficient and less burdensome.

What can you do to level the playing field with the FCA?

If I were you, I wouldn’t wait for the FCA to take over. I wanted to be prepared for their systematic, data-driven, and unwavering approach.

Have a clearly designated Money Laundering Reporting Officer (MRLO) and ensure you have strict processes in place to:

• Enterprise-wide risk assessment
• Customer due diligence
• Continuous monitoring
• Suspicious activity reporting
• Recording
• Staff training

Firms that rely on manual processes, spreadsheets or inadequate digital systems will struggle under the FCA regime.

Improve your digital systems, know your customers and prepare for the FCA

Look at custom solutions like IRIS Elements AML. It can automate risk assessments, bulk ID checks, and suspicious activity reporting.

This can provide an FCA level compliance system that is ready for rigorous regulatory scrutiny, including:

• Advanced dashboard with real-time alerts
• Secure document management
• Biometric ID check
• Beneficial ownership management
• Risk-based automation that directs resources to real threats
• Comprehensive audit trails that provide instant proof of compliance
• Compliance officer personal development and management records
• Rest assured that your AML obligations are managed professionally

Efficiency will become more important under the FCA’s higher standards. IRIS Elements AML saves you 3.5 practice hours per client during onboarding, plus an additional 2.5 hours per employee per month when integrated with IRIS Elements Practice Management.

Refresh your risk assessment

Conduct a comprehensive enterprise risk assessment that aligns with the NRA’s 2025 findings (see above).

Train staff

Everyone running a practice should receive refresher training on AML obligations, red flags and reporting procedures. The FCA expects competency across the team, not just the MLRO.

Audit your documentation process

Ensure each client relationship has proper CDD documentation, ongoing monitoring records, and risk classification justification.

Update policy

AML policies and procedures need to be reviewed against FCA standards, not just the minimum requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on Payers) Regulations 2017.

The unpleasant truth (if you don’t do anything)

The accounting profession is comfortable with self-regulation. We have professional bodies that understand our work, understand our language and trust us, but this is necessary given the weakness of law enforcement.

The FCA will not be your friend. It doesn’t matter if you are a sole practitioner or a Top 50 firm. They don’t care if you’ve been a member of ICAEW for 40 years. They care about one thing: are you preventing money launderers from using your services to legitimize criminal proceeds?

If you can answer that question with confidence – and evidence – you’ll be fine. If you can’t, the next few years will be very uncomfortable.

Find the IRIS AML Element

Eva Mrazikova is a Senior Product Marketing and Digital Transformation leader, with over 20 years of experience in accounting, marketing and technology. As Senior Director for PMM and broader ACC strategy at IRIS Software Group, he leads go-to-market strategy, product positioning and customer engagement. Eva is also an accountant, combining financial expertise with a passion for innovation and technology.