Financial crime: protecting the hive

Introduction

A few weeks ago, I visited the Bank of England Museum to see a new exhibition on financial crime. I had expected banknotes and gold bars – not bees.

Rather than bullion, I saw a working beehive and learnt how colonies defend themselves by reading signals, sharing information and taking collective action.

Every bee gets checked at the door. If something’s off, the colony responds – together, and quickly.

That same instinct and partnership are what we need to fight financial crime.

The criminals we’re up against don’t present themselves for checking, and the system we’re protecting is much larger than a hive.

And with the threat of financial crime getting worse, the stakes are higher than ever.

Fraud accounted for nearly half of all crime in England and Wales last year, and estimates suggest that over £100bn is laundered through or within the UK each year.

Two sides of the same coin: fraud makes the money. Laundering moves and 'cleans' it.

Increases in global instability and rapid technological change have made it easier than ever to commit both at scale. 

At the FCA, we disrupt financial crime every day across thousands of firms. And we are acting against the full spectrum of financial crime – from fraud and online scams to money laundering and insider dealing.

But we still don’t have the whole picture, or all the answers.

Nobody does.

If we’re going to take this on, we have to do it together, and work across the system as partners.

What it takes

Partnership can’t just mean regulators and law enforcement working together. Firms are crucial, too.

Firms see signals every day: a payment that doesn’t quite look right, or a client story that doesn’t add up. 

That’s why we back initiatives like the NCA’s data fusion programme. It brings together banking data with law enforcement and regulatory intelligence to help us identify hidden connections and emerging threats earlier.

Firms also need to work together and share information between themselves.

That’s part of the thinking behind the Economic Crime and Corporate Transparency Act, which gives firms a clear, safe route to share intelligence and stop harm before it spreads.

Partnership also means focusing our collective efforts so we’re all pulling in the same direction.  

Prioritisation is crucial here.

Our work with industry and the NCA led to last year’s publication of nine financial crime priorities, several of which feature money laundering and fraud.

We are now working with firms to identify lower-priority activity and focus resources where they will have the greatest impact. For example, the Defence Against Money Laundering Suspicious Activity Report threshold.

Industry told us the old threshold generated too many low-value reports and tied up resource, we agreed, and supported raising it to £3,000.

That’s led to fewer low-value reports and more capacity to focus on higher-risk activity. This is exactly the outcome we’re aiming for: more concentrated effort, greater impact.

What’s changing

At the backend of 2028, the FCA will begin to take on responsibility for AML supervision of 60,000 entities in the legal and accounting sectors.

We’ve heard some concern.

Can a regulator built for banks and asset managers really understand these sectors well enough to supervise them effectively?

Fair question.

We’re a multidisciplinary organisation with almost 400 practising lawyers.

But understanding the law isn’t the same as understanding how your firms operate. Which is why we’re committed to building the sector-specific expertise that informed, proportionate and effective supervision calls for.

We’re already working with Professional Body Supervisors and engaging some of the firms we’ll be regulating to learn from their experience and understand their needs.

But let me touch on 3 areas where we already have real strength.

One: We supervise thousands of firms across a vast range of sectors and sizes.

We adapt our approach depending on who we’re dealing with, and we won’t be taking a one-size-fits-all approach here, either.

Our focus is on ensuring a firm’s core anti-money laundering controls are effective for the risks it presents.

Not overloading firms with requests and paperwork.

In other words, creating friction for the criminals. And letting everyone else get on with their business.

Two: We are increasingly focused on finding risk early and disrupting it at pace.

That’s not new for us. We’ve been building a track record of intelligence-led, proactive detection and disruption for some time.

Take Annex 1 firms, the businesses registered with us solely for anti-money laundering purposes.

Over the past year, we’ve sharpened our focus on this group’s potential links to criminality.

We’ve identified weaknesses criminals could exploit – such as over-reliance on parent company controls and complex lending structures – and we are acting.

That includes gathering information on firms’ activities and risks.

Scrutinising new applications more closely.

Prioritising firms where we see the most harm.

And taking both supervisory and enforcement action to disrupt that harm.

That’s what intelligence-led supervision is about: identifying risk and targeting action where it matters most.

Finally, three: We’re using new and emerging technology to sharpen our focus.

Technology, including AI, helps us to work through large data sets and spot key risks more quickly. 

Our intelligence systems allow us to process over 56 million records every day and flag high-risk firms earlier than we could before.  

We’re also combining our data with that of partners to uncover significant organised crime activity within the financial services sector.

Adding intelligence from the legal and accountancy sectors to the mix will only make this work more effective.

Looking ahead, we’ll keep exploring what technology can offer, including the potential for agentic supervision – something we’re looking at more broadly across the FCA.  

Of course, AI doesn’t – and won’t – replace human judgment. But it can strengthen it.  

When people ask whether we can supervise this new population effectively, my answer is yes.

And we can do it with a proportionate, predictable and technology-enabled approach. 

What it means for you

So, what does this mean for you?

You’re already on the front line in the fight against financial crime and subject to the Money Laundering Regulations.

You do your due diligence, monitor risk and report suspicious activity.

In that sense, the fundamentals are familiar – and if you’re doing the right thing, none of that changes.

We’ll take a risk-based, intelligence-led approach, like we do for every sector we regulate.

The information we ask for, and how much, depends on the risk you face.

We will aim to reduce duplication and firm burden where we can.

A good example, from a different sector, is our work on [2]transaction reporting[2].

By reducing the number of reporting fields and removing duplicative requirements, we will cut firm costs by £100m a year.

I said it earlier, but it bears repeating: if you’re trying to do the right thing, we’re not looking to catch you out. Our focus is on crime and criminals.

We know most of you uphold strong standards and have proportionate controls in place.

But the small minority who enable crime should expect us to find them – and to face consequences.

Rooting them out protects your reputation and keeps this a level playing field.

So we’ll be working with you and law enforcement partners, taking an intelligence-led approach to detect, disrupt and prevent professional enablers of financial crime.

Conclusion

Partnership, communication and trust will be central to making this work.

I want you to know that we’re committed to your sector.

And to earning your trust through ongoing conversation and engagements like this one.

Just as a colony doesn’t rely on one bee, fighting financial crime doesn’t rely on one organisation.

The FCA isn’t on one side and firms on the other. We’re on the same side, confronting the same enemy: the criminals.

We want to build this with you and will continue to listen.

Which makes my ask simple: engage with us. Share your experience and ideas for how we can be more effective partners in the fight against financial crime.

Because together, we can stop more than just the crime – we can disrupt the organised criminals behind it.

And that’s a job none of us can do alone.