This post was originally published on fca.org.uk
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.