BNPL regulation has arrived: the compliance challenge now is proving good customer outcomes
The FCA is raising the bar on financial crime controls, placing greater emphasis on whether firms
16/07/26
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Rethinking financial crime controls in a system-wide risk environment
The FCA is raising the bar on financial crime controls, placing greater emphasis on whether firms can show they reduce real-world risk. As fraud, money laundering, sanctions evasion and cyber-enabled crime become more interconnected, firms need a more dynamic, intelligence-led and system-wide approach to prevention.
The FCA’s recent speech on working together against financial crime can at first glance read like a familiar call for greater collaboration. Firms, regulators and law enforcement have long been encouraged to share intelligence and respond collectively to emerging threats. However, taken in context, the message feels more significant than a simple restatement of that position.
What the FCA is pointing to is a shift in how financial crime itself needs to be understood. It is no longer something that can be effectively contained within the boundaries of a single firm. It is a system level issue shaped by how risks move across firms, sectors and jurisdictions – and how well those connections are recognised and acted on.
A more connected and complex threat landscape
That shift reflects the way financial crime is evolving in practice.
The FCA’s recent comments highlight the increasingly organised, technologically enabled and cross-border nature of financial crime, with fraud, money laundering, sanctions evasion and cyber-enabled activity often forming part of the same chain of events.
For firms, this is rarely theoretical. Suspicious activity does not always present in neat categories. What begins as a fraud case may quickly raise anti-money laundering (AML) concerns, while a cyber incident can expose weaknesses in due diligence or transaction monitoring. In isolation, each issue may appear manageable. Taken together, they can point to something more complex and harder to detect, particularly where low-level activity forms part of a wider pattern.
The challenge is not simply scale, but interconnection.
Many financial crime frameworks are still structured around separate risk types with different systems, processes and governance. In a more dynamic environment, that separation can create blind spots where no single view of risk exists.
Why firm‑level controls are no longer enough
The regulator implies that financial crime cannot be tackled effectively through firm level controls alone. It calls for a broader response, underpinned by better information sharing, collaboration and use of technology.
In practice, this raises questions about how firms use external intelligence and how quickly that insight feeds into internal decision making. Industry forums and information sharing initiatives are often well established but not always embedded in day to day activity. The FCA’s direction of travel suggests that needs to change, with external insight actively shaping monitoring, escalation and risk decisions.
Prioritisation is now a regulatory expectation
Alongside collaboration, the FCA’s message on prioritisation is equally key.
The scale and pace of financial crime mean it is not possible to address every threat equally, and firms are expected to make informed decisions about where to focus their efforts. This reflects a more realistic operating environment – and also raises expectations. It is no longer enough to demonstrate that a broad framework exists. Firms need to show how they determine which risks matter most, how those risks are evolving, and how their resources are being directed.
For many firms, this requires a more dynamic approach to risk assessment. These exercises can become static, built around established categories and refreshed periodically. In a fast moving environment, that risks a disconnect between documented risk and reality.
A more responsive view is needed, one that captures how risks intersect and where new vulnerabilities are emerging.
From control frameworks to real‑world effectiveness
There is also a shift in how financial crime controls are likely to be judged. The FCA’s focus is moving beyond whether appropriate policies and processes are in place to whether they reduce financial crime risk in practice. That brings outcomes into sharper focus still. A framework may be technically compliant, yet still could fall short if it does not reflect how financial crime is occurring or struggles to adapt as threats evolve.
This is particularly relevant where controls have not been revisited in light of changing risks.
AML and financial crime frameworks may remain aligned to expectations on paper but be less effective against increasingly complex and interconnected activity.
What this means in practice for firms
Seen in this context, the FCA’s message is less about new requirements and more about raised expectations.
Firms need to ensure that financial crime risk assessments reflect evolving threats and recognise how different risks connect. Policies and controls should be reviewed to confirm they remain effective in preventing financial crime as it occurs today, not as it was previously understood.
There is also an ongoing expectation that staff are appropriately trained, with a clear understanding of how different types of financial crime interact in real scenarios.
These are not new activities but the expectation to evidence them – and demonstrate that they are working – is increasing.
A system‑level view of risk
Financial crime is increasingly viewed through a system wide lens, where effectiveness depends not only on what individual firms do but also on how well the wider ecosystem functions.
In this environment, many firms are finding that the challenge is not identifying the issues but having the capacity and expertise to respond at pace. As financial crime risks become more complex and interconnected, so does the operational burden of maintaining effective controls and adapting to change.
This is where immediate, specialist support can make a meaningful difference.
TCC’s financial crime solutions help firms stabilise, scale and improve their financial crime programmes through senior interim leadership, managed remediation, framework strengthening and tech‑enabled workflows. Whether internal teams are stretched, backlogs are growing or oversight gaps need urgent attention, TCC can provide pre‑vetted interim professionals, trained analysts and experienced specialists to support effective, compliant delivery.
Get in touch to find out how we can support your firm.