The FCA takeover of AML: one accountant’s view on what you must 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 change to compliance in a generation. It will alter how AML is carried out by every accounting firm in the UK.

Despite professional bodies voicing concern, we must accept that the decision is final.

Now, as accountants, we must prepare.

How this happened: the professional body problem 

Let’s be honest, the professional body supervision system has been struggling.

The latest Office for Professional Body Anti-Money Laundering Supervision (OPBAS) report confirmed what many of us suspected: not a single professional body supervisor is “fully effective” across all areas.

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

More worrying is that enforcement has been inconsistent. The number of fines declined even as supervisors identified more non-compliance. Over six months, there were £98,870 in total fines issued to 27 accountancy firms and tax advisers. I consider that a slap on the wrist compared to the scale of money laundering risk we’re supposed to be managing. 

We’ve also seen professional bodies give firms too much time to “rectify deficiencies” rather than take decisive action. I understand the collegial relationship between professional bodies and their members, but when it comes to fighting financial crime, collegiality can’t outweigh enforcement.

What does the FCA takeover of AML mean for you?

The Financial Conduct Authority doesn’t mess around.

With the FCA taking over supervision of approximately 60,000 accountancy, legal and TCSP firms, the regulator will bring its financial services enforcement mindset to your practice.

Let’s see what our profession should anticipate.

1. Expect stricter enforcement

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

That’s the culture coming to our profession. 

2.  Expect greater scrutiny

The FCA will use AI, machine learning, and real-time data analytics to spot non-compliance. They will spot patterns and zero in on high-risk firms. This is in contrast to industry associations, which are built to empathise with accountants’ day-to-day challenges. 

3. Expect sky-high standards

The FCA’s approach has never been soft. Its focus is on financial crime prevention. Expect it to prosecute and also share information it uncovers with law enforcement agencies.

4. Expect costs to increase

The FCA needs to expand to supervise 60,000 firms and build expertise in the process. Someone has to pay for that infrastructure and learning, and it will likely be us. Our professional body membership fees won’t disappear; we’ll probably have additional FCA supervision fees on top. The general fear is that this will have a disproportionate impact on smaller firms, and they will have to save yet more money to compensate.

What don’t we know yet?

There is more that will be revealed in due course; primary legislation is required for the FCA to take over, and HM Treasury will consult on the FCA’s powers in early November.

Details include:

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

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

Impact on small firms: Uncertainty remains about how burdensome the new regime will be for sole practitioners and small practices.

The current supervisors are remaining active until the changeover takes place. Expect them to be tougher in their actions: OPBAS is pressuring them to demonstrate effectiveness in this interim period.

However, nothing changes the fact that the FCA is taking over. That much is certain.

What is the silver lining?

Here’s the thing: we as accountants should be held to higher standards. Those high standards help stop criminality in its tracks.

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

It’s only getting more complex, with the rise of fintech and cryptoassets, evolving typologies, new high-risk countries and increasingly complex money laundering schemes.

If the current professional body system isn’t catching enough non-compliance, then it’s not protecting the profession’s reputation. Every accountant who becomes an unwitting facilitator of money laundering damages all of us. 

A stricter, more consistent FCA regime could: 

• Ensure all firms meet the same standards. 
• Reduce reputational damage to the profession from high-profile failures. 
• Provide more explicit guidance and expectations than the current fragmented system. 
• Use technology to make supervision 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’d want to be prepared for their systematic, data-driven and unwavering approach.

Have a clearly appointed Money Laundering Reporting Officer (MRLO) and ensure you have watertight processes for:

• Firm-wide risk assessments
• Customer due diligence
• Ongoing monitoring
• Suspicious activity reporting
• Record-keeping
• Staff training

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

Upgrade your digital system, know your customer, and be FCA-ready

Look at a dedicated solution like IRIS Elements AML. This can automate risk assessments, bulk ID checks, and suspicious activity reporting.  

It can provide FCA-grade compliance systems ready for rigorous regulatory scrutiny, including:

• A powerful dashboard with real-time alerts
• Secure document management
• Biometric ID checks
• Beneficial ownership management
• Risk-based automation that directs resources to genuine threats 
• Comprehensive audit trails that provide instant evidence of compliance 
• Personal development records and compliance officer management
• Peace of mind that your AML obligations are managed professionally 

Efficiency is going to become more important under the FCA’s higher standards. IRIS Elements AML saves your practice 3.5 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 firm-wide risk assessment aligned with the 2025 NRA findings (see above). 

Train staff

Everyone in the practice should be getting refresher training on AML obligations, red flags, and reporting procedures. The FCA will expect competence across the team, not just the MLRO. 

Audit your documentation process

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

Update policies

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 the Payer) Regulations 2017. 

An uncomfortable truth (if you do nothing)

The accountancy profession has been comfortable with self-regulation. We’ve had professional bodies that understand our work, speak our language, and trust us, but that was necessary given the lack of enforcement. 

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

Discover IRIS Elements AML

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