The Financial Conduct Authority (FCA) is the UK’s financial regulator, responsible for overseeing conduct in financial markets, protecting consumers, and ensuring the integrity of the financial system. Established in 2013, the FCA supervises over 50,000 firms across banking, investment, and insurance.
In AML compliance, the FCA plays a critical role by ensuring financial institutions implement effective systems and controls to prevent money laundering, terrorist financing, and other forms of financial crime.
FCA
The FCA is an independent public body funded by the firms it regulates but accountable to the UK Treasury and Parliament. It oversees both prudential and conduct regulation within the UK, with a strong focus on protecting consumers and safeguarding financial markets.
In terms of AML, the FCA’s role includes:
Supervising firms to ensure compliance with the UK’s Money Laundering Regulations.
Overseeing how firms apply a risk-based approach to customer due diligence and transaction monitoring.
Enforcing penalties against institutions that fail to meet AML obligations.
Why The FCA Matters In AML Compliance
The FCA matters in AML compliance because it ensures that UK financial institutions apply strong safeguards against financial crime.
Legal enforcement: Firms must comply with the Money Laundering Regulations 2017, which align with EU directives and FATF recommendations.
Consumer protection: By holding institutions accountable, the FCA reduces the risk of consumer harm caused by illicit financial activity.
Cross-border consistency: The FCA works with bodies like the Financial Action Task Force (FATF) and overseas regulators to align UK AML practices with international standards.
Without FCA oversight, the UK’s financial system would be far more vulnerable to exploitation by criminals.
Key Functions Of The FCA In Compliance
The FCA has several functions that directly impact AML compliance obligations in the UK.
Supervisory Oversight
The FCA assesses whether firms have adequate AML frameworks in place, including customer due diligence, ongoing monitoring, and suspicious activity reporting.
Enforcement Actions
It has the authority to issue fines, sanctions, or restrictions against firms that breach AML requirements. Major cases demonstrate the FCA’s willingness to penalise non-compliance.
Guidance & Risk-Based Approach
The FCA issues sector-specific guidance that explains how firms should apply a risk-based approach to AML obligations, ensuring proportional and consistent controls across industries.
The Future Of The FCA’s Role In AML Compliance
The FCA’s role is expanding as financial crime risks evolve in the digital age.
Crypto-assets: The FCA regulates UK-based crypto-asset businesses under AML laws, requiring registration and compliance with due diligence obligations.
Data-driven supervision: The FCA increasingly uses data analytics and AI to spot misconduct and systemic risk in near real time.
International cooperation: Post-Brexit, the FCA continues to align with FATF and collaborate with regulators worldwide to manage cross-border AML risks.
As technology and financial services change, the FCA’s combination of enforcement power and consumer focus will remain central to protecting the UK financial system.
Strengthen Your FCA-Related Compliance Framework
The FCA sets high standards for AML compliance, requiring UK firms to demonstrate strong systems, controls, and reporting. Institutions that align with FCA rules not only avoid regulatory penalties but also strengthen their reputation and resilience.
Facctum’s Customer Screening and Transaction Monitoring solutions help firms meet FCA expectations by detecting risk in real time and applying proportionate, risk-based controls.
Contact Us Today To Strengthen Your AML Compliance Framework
