Financial Crime Fines in the UK: Trends, Risks, and Regulatory Focus (2018-2024)
The UK financial services sector has faced increasing scrutiny over financial crime in recent years, with regulatory authorities imposing significant fines on institutions failing to comply with anti-money laundering (AML) and financial crime prevention regulations. Analysing both the sum of fines by reason and the number of fines by financial crime category, key trends emerge that highlight shifting enforcement priorities, the biggest compliance risks, and the evolving nature of financial crime oversight.
Financial Crime Fines: A Multi-Billion Pound Issue
From 2018 to 2024, financial crime-related fines totalled £763.3 million, making it one of the most heavily penalised compliance areas. While overall fines fluctuate year to year, financial crime enforcement remains a persistent concern.
Peak in 2021: Record-Breaking Financial Crime Penalties
The highest financial crime-related fines were imposed in 2021, totalling £476.7M, making up nearly 84% of all regulatory fines that year.
This suggests a significant regulatory crackdown, likely in response to major money laundering and fraud cases.
Sharp Decline in 2023 and 2024: A Sign of Improvement or Delayed Enforcement?
Financial crime fines dropped sharply from £125.1M in 2022 to just £20.6M in 2023, with zero fines recorded in 2024.
Possible explanations include improved compliance, a shift in regulatory focus, or a lag in enforcement actions.
What Financial Crime Compliance Failures Are Being Penalised?
Examining the number of enforcement actions by category provides further insight into where institutions are failing in AML compliance.
1. Transaction Monitoring Failures (11 fines)
Most heavily penalised area, indicating widespread deficiencies in detecting and reporting suspicious transactions.
Many firms struggle to implement real-time monitoring systems and effectively analyse high-volume transactions for red flags.
2. Enhanced Due Diligence (EDD) (10 fines)
High number of fines suggests institutions are failing to properly scrutinise high-risk clients, such as politically exposed persons (PEPs) and those in high-risk jurisdictions.
A failure in EDD increases exposure to money laundering and illicit finance risks.
3. Customer Due Diligence (CDD) & Risk Assessments (8 fines each)
Firms often fail to properly identify and verify customers before onboarding, creating vulnerabilities in their AML frameworks.
Weak risk assessments mean firms fail to identify suspicious patterns in client behaviour.
4. Training Deficiencies & Source of Wealth/Source of Funds Issues
Only one fine related to AML training suggests regulators may be shifting focus towards other compliance failures.
Few fines for source of wealth/source of funds failures indicate that while important, these are less frequently identified as standalone violations—often falling under broader EDD and transaction monitoring failures.
Key Takeaways & Industry Implications
1. Regulatory Scrutiny on Financial Crime Remains High
Financial crime fines remain a significant proportion of total regulatory penalties, averaging nearly £109M per year since 2018.
2021 was a watershed moment, but enforcement remains strong, with over £125M in fines in 2022 and ongoing penalties in 2023.
2. Transaction Monitoring & EDD Failures Are the Biggest Risks
Firms must invest in AI-driven monitoring solutions to detect suspicious transactions in real time.
Enhanced due diligence must be tailored to risk profiles, particularly for high-risk clients and cross-border transactions.
3. Decline in 2023-2024 Fines May Be Temporary
The sharp drop in both fines and enforcement actions in 2023-2024 does not necessarily mean financial crime risks have reduced.
Regulatory enforcement may be cyclical, and a resurgence in fines could occur as ongoing investigations conclude.
4. Compliance Costs vs. Regulatory Penalties
While regulatory fines are severe, the cost of non-compliance extends beyond penalties—including reputational damage, loss of business, and higher long-term compliance costs.
Institutions must proactively enhance AML frameworks rather than react to enforcement actions.
Final Thoughts: Preparing for the Future
Despite fluctuations in enforcement levels, financial crime remains a top regulatory priority. The data reveals persistent challenges in transaction monitoring, EDD, and CDD—areas that require continued investment in compliance technology and training.
Financial institutions must take proactive steps to strengthen AML frameworks, improve transaction monitoring, and enhance due diligence processes to avoid costly fines and reputational damage. With regulators maintaining a firm stance on financial crime, firms that fail to adapt risk becoming the next target of enforcement actions.