Threat assessment: The UK's latest money laundering risks

The UK's latest National Risk Assessment of Money Laundering and Terrorist Financing (National RA) landed in July 2025.¹ Aiming to provide a clear and comprehensive picture of current and emerging risks, the National RA cross refers to the Economic Crime Plan 2023 – 2026² and references a host of financial crime developments from the past few years, such as the Economic Crime (Transparency and Enforcement) Act 2022 and Economic Crime and Corporate Transparency Act 2023.

This briefing provides a high-level overview of the National RA, including summary example sector risks and cross-cutting challenges presented by money laundering and wider financial crime issues.

In response to the National RA, organisations across the MLR-regulated sectors need to carefully consider and update their own business-wide and customer risk assessments, evolving their policies, procedures and controls where required.

Regulated firms will need to map their anti-money laundering (AML) frameworks across a range of business activities, whether it be M&A and AML due diligence, or launching new products and undertaking the associated risk assessment. Ultimately, these activities should be informed by the latest National RA as a starting point, at the very least, given business wide risk assessments are often found wanting by regulatory bodies and regularly cited as a deficiency in regulators' supervisory and enforcement action.

Key takeaways include:

1. Financial and professional service firms continue to be vulnerable to organised criminals seeking to integrate illicit funds into the legitimate financial services sector and leverage the legitimacy of the professional services sector.
2. The increase of new financial technologies has played a role in changing the UK's risk profile since 2020. Whilst an imperative in the UK's innovation and growth agenda of the current government, it has proven to be a double-edged sword with electronic money and payment services being utilised by bad actors.
3. The government will also publish a new Anti-Corruption Strategy in 2025, reflecting measures to address the UK's domestic vulnerabilities and recognising the cross-cutting issues across wider financial crime issues, with risks not just being posed by money laundering alone. The UK Government is also deepening partnerships globally such as with the UAE to tackle illicit financial flows, including the work of the Combined Anti-Money Laundering Operational Team (CAMLOT), which is a joint initiative designed to tackle money laundering operations and identify hidden financial networks tied to illicit activities.

The contents of the National RA should come as no surprise given statistics such as fraud now being the most commonly experienced crime in the UK, accounting for over 43% of crime, and touching ever-increasing aspects of UK sectors and businesses. Bringing this to life, the National RA sets out the risks for regulated sectors at Chapter 5 (see below for further detail).

Sector risks

The National RA assesses Electronic Money Institutions (EMI), Payment Services firms and the Crypto sector as high risk for money laundering (moving up from medium risk) with seven regulated sectors remaining at high risk.

By way of example, the following dedicated sector sections detail the vulnerabilities, scale and mitigations of risks:

1. EMIs and payment service firms: As an alternative to banking models and having grown significantly in scale since 2020, the UK continues to embrace faster, nimble financial services and non-bank payment mechanisms online. In 2023, the Financial Conduct Authority (FCA) registered/authorised payments to a value of GBP1.1 trillion, an increase from GBP477 billion in 2020. Services are increasingly complex and diverse, increasing cross-border means of laundering for criminals. For EMIs and PSPs, simpler onboarding processes, use of agents to bring in customers and a heavy reliance on outsourcing compliance functions to third parties all present risks of abuse by criminals. Mitigants include the FCA significantly increasing its focus on financial crime in this sector, with an increase of 231% in supervisory activity for the sector between 2020 and 2024, resulting in greater compliance scrutiny of their regulated activities in this upgrade from medium to high risk sector.
2. Trust or Company Service Providers (TCSPs): Remain high risk, and cover a wide range of businesses, including formation agents, virtual office providers and trustee or nominee services. They can be used by criminals for mass company incorporations and can assist in layering and obscuring beneficial ownership through complex, multi-jurisdictional and opaque corporate structures, with anonymity, particularly when servicing international clients and source of funds are harder to trace. They can also operate in partnership with EMIs to provide company/financial service packages, increasing the speed in which money can be moved. Mitigations for this sector include increased regulatory supervisory efforts and businesses must also navigate new UK regimes, such as the Authorised Corporate Service Providers regime, which regulates who can form firms with Companies House.
3. Wealth management: Remains high risk, and the sector covers a spectrum of providers, from wealth advisory firms to banks with diversified wealth management services, servicing customers with a range of income levels. The exposure to domestic and international high risk customers and jurisdictions, such as High Net Worths and Family Offices (including unregulated Family Offices), reflect a need for a range of measures across the sector, including increased supervisory action (eg new guidance from the FCA on the treatment of Politically Exposed Persons – see FG25/3). Additionally, a continual trend of online apps in the execution-only trading space, with parallels to EMIs and PSPs, services ease-of-access, reduced understanding of the purposes or nature of transactions and when managing money laundering risks where business is customer-directed and transaction volumes are high.

Cross-cutting challenges

Overarching references to tax evasion, fraud and modern slavery also show how interconnected these issues are and how deeply connected they are to money laundering in the UK. National regulators and law enforcement bodies such as the FCA, HM Revenue & Customs (HMRC) and the Serious Fraud Office (SFO) continue to place financial crime at the heart of their latest strategies. This topic features in the top four of FCA priorities for 2025 – 2030. Any progress to be made in tackling the issue requires an increasingly coordinated approach.

UK businesses will need to respond accordingly, with a better appreciation of cross-cutting themes and UK laws, guidance and industry standards that are all changing at pace to grapple with the significant threat perceived and undoubted enforcement action that will continue to be taken in this space. An immediate consideration will be to consider their wider risk environment for anti-fraud purposes, with the new failure to prevent fraud offence having just come into force on 1 September 2025 – see here for our commentary (link and link) and comparative guide.

The National RA should be considered in the context of a wider range of AML proposals for reforms, such as the UK's consultation on the effectiveness of the Money Laundering Regulations (MLRs), draft statutory instrument and policy note, alongside the EU's sixth Anti-Money Laundering Directive (AMLD6) and associated broader implications for non-EU businesses.  

If you wish to discuss your organisation's approach to tackling its money laundering risks, whether with support on your periodic risk assessment updates, a review of policies and procedures or otherwise, please contact the below:

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¹ HM Treasury, National Risk Assessment of Money Laundering and Terrorist Financing 2025, July 2025. Available here
² HM Government, Economic Crime Plan 2, 2023 - 2026. Available here