Is KYC/AML compliance drowning your UK firm under tightening FCA scrutiny?
For compliance officers and heads of risk in UK asset management firms, hedge funds, brokerages and law firm, Know Your Customer (KYC) and Anti-Money Laundering (AML) processes are a relentless burden. In 2025, the stakes are higher than ever. The FCA has amplified its enforcement activity and global AML software spending is surging. At the same time, £88 billion is now laundered through the UK annually, reinforcing the need to modernise KYC/AML systems—or risk falling behind and facing reputation damage1.
This urgency is reflected in rising compliance costs. Over the past two years, 65% of firms have reported increased AML/CTF (counter-terrorism financing) expenditure2. The majority of these costs—around 70%—are absorbed by staffing, with firms relying heavily on dedicated AML teams to keep up3. But relying on manual processes alone is no longer sustainable.
So, how can you stay ahead without sinking under the weight of compliance? Let’s explore how you can transform your strategy.
The KYC/AML Headache: A Growing Challenge
Compliance officers know the pain all too well: KYC and AML processes are time-consuming, error-prone, and costly. The UK’s Money Laundering Regulations, amended post-Brexit, demand rigorous due diligence, especially for high-risk clients. The FCA’s 2024/2025 guidance on financial crime prevention pushes firms to enhance transaction monitoring and customer onboarding. Yet, manual processes – relying on disparate data sources and repetitive checks – lead to inefficiencies and high false-positive rates.
Following up, the FCA’s call for integrated fraud and AML (FrAML) strategies means compliance teams must now tackle both simultaneously. And with the FCA’s enforcement approach, including public disclosure of investigations within 10 days4, a single KYC slip could trigger reputational damage and hefty fines. Imagine a high-risk client slipping through your checks, landing your firm in the FCA’s crosshairs—can you afford the fallout?
The need for robust AML systems extends beyond domestic concerns. With the US representing a hefty 59% of AML related fines5, integration of cross-border compliance emerges as a strategic imperative for UK firms . The reality is clear: regulators on both sides of the Atlantic are tightening oversight. Without modern systems, compliance leaders risk being overwhelmed—and potentially sanctioned.
The 2025 Game-Changer: Digital Identity and the Trust Framework
The UK’s Trust Framework Bill, that just passed a huge milestone by receiving Royal Assent, is a pivotal shift for KYC/AML compliance6. This legislation establishes a statutory digital identity system to combat online fraud. By enabling secure, verified digital identities, the Trust Framework promises faster, safer customer onboarding while aligning with FCA expectations for robust KYC processes. But integrating digital identity into existing workflows is no small feat. Firms need adaptable technology to bridge the gap between regulatory demands and operational reality.
This is where RegTech shines. Leo RegTech’s platform leverage the Trust Framework, streamlining KYC/AML with cutting-edge automation. Our solution integrates digital identity checks, ensuring compliance with FCA standards while slashing onboarding times. For UK asset managers, brokers and lawyers, this means faster client acquisition without compromising security, a competitive edge in a crowded market.
Seizing Opportunity Through Automation
The technology imperative is no longer aspirational—it’s existential. PwC Global Compliance Survey 2025 Predictions suggest global AML software will nearly double to US$5.9 billion by 2029, with RegTech spending alone rising by 23.6% in 2025 . As well, results shows that 82% plan to invest more in technology to drive compliance activities, 37% already use Customer due diligence/assessments (KYC/AML) and a 11% are not using but planning on investing gin KYC/AML7.
For UK firms, this trend signals a tipping point: those not embracing advanced automation will struggle with rising costs, regulatory complexity, and customer expectations. The businesses that adopt AI-driven, end-to-end compliance tools will seize the advantage, reducing risk, saving cost, and enhancing agility8 [8].
How Leo RegTech Steps In
Leo RegTech is purpose-built to address these challenges. It delivers a single, integrated platform for client onboarding, identity verification—including biometric validation—AML screening (background checks, including PEP, sanctions, enforcements and adverse media) and enhanced due diligence, all within one seamless workflow.
Our AI-driven solution significantly reduces false positives (60%), freeing compliance teams to focus on genuine risk concerns. The platform is fully compliant with UK Money Laundering Regulations and FCA standards and can be configured to meet US regulatory requirements, enabling firms to serve clients on both sides of the Atlantic without rebuilding systems.
What’s more, audit-ready and historical records ensure transparency for audits, senior management, and regulators alike. The platform’s scalability means it can grow with you.
To further enhance this is how Leo transforms KYC/AML compliance, by simplifying the entire process, going far beyond basic checks and reports.
Some of the solution’s features include:
- User access for potential clients to deliver all relevant information and evidence KYC and ID checks for the compliance team to review. The Software will chase up missing documents too.
- Leo’s CDD reports link to client registers and repositories for relevant documents. It also links to remediation registers if any anomalies are picked up. And this is the point where compliance can decide if it is necessary to carry out enhanced due diligence if this was not yet the case.
- Integrated meeting reports configurable to your needs to evidence regular reviews and discussions.
- Duplication of reports year on year to evidence progress and improvements on a particular client where necessary.
- Time savings of about 40% on any one CDD.
- Real-Time Monitoring: Leo’s real-time alerts flag suspicious activities instantly, aligning with the FCA’s 2025 focus on proactive enforcement.
In a competitive UK market, these outcomes aren’t just nice-to-haves, they’re essential for staying ahead.
The ROI Case: Tangible Benefits You Can’t Ignore
The KYC/AML landscape in 2025 is more demanding than ever, but it’s also an opportunity to transform your compliance strategy.
Adopting Leo RegTech brings measurable, board-level value. Cost savings come from streamlining manual processes and reducing onboarding friction, which translates into lower costs per client and significantly improved productivity. And as resources are freed from repetitive tasks, compliance teams can shift focus to higher-value advisory work, boosting overall strategic impact.
Client experience also benefits. Faster, smoother onboarding means more clients complete the process, enhancing acquisition and retention. For growth-oriented asset managers, brokerages, consultancies and law firms, this translates into increased revenue potential.
Ready to revolutionise your KYC/AML compliance? Click the link below to schedule a free demo and see how Leo RegTech can transform your workflows. Stay ahead of the FCA, reduce costs, and build client trust, all in one platform. The future of compliance starts now.
References & Sources
- https://www.mordorintelligence.com/industry-reports/uk-anti-money-laundering-solutions-market ↩︎
- https://www.pwc.co.uk/financial-services/assets/pdf/emea-aml-survey-2024.html.pdf ↩︎
- https://www.thebanker.com/content/d3d0d169-9ed0-529a-838c-dba4e46a345f#:~:text=August%201%202024-,UK%20banks’%20compliance%20spending%20surges%20amid%20regulator’s%20AML%20concerns,analytics%20company%20LexisNexis%20Risk%20Solutions. ↩︎
- https://www.fca.org.uk/news/press-releases/fca-seeks-further-views-enforcement-transparency-proposals#:~:text=Firms%20would%20be%20given%2010,notice%20before%20it%20is%20published. ↩︎
- https://thefinancialcrimenews.com/bank-fi-aml-sanctions-fines-penalties-in-the-21st-century/#:~:text=In%20More%20Detail:,US$1.9%20billion%20a%20year. ↩︎
- https://enablingdigitalidentity.blog.gov.uk/2025/06/20/uk-digital-identity-legislation-passes-another-important-milestone/ and https://www.business-reporter.co.uk/management/understanding-the-uks-new-disd-regulation ↩︎
- https://www.pwc.com/gx/en/issues/risk-regulation/pwc-global-compliance-study-2025.pdf ↩︎
- https://www.fca.org.uk/news/press-releases/fca-fines-metro-bank-16m-financial-crime-failings ↩︎
