Asset Management Financial Crime Controls

While many firms demonstrated strong governance and financial crime frameworks, the findings also identified several recurring gaps that should prompt organisations to reflect on the maturity of their own controls.  

Four questions asset managers should be asking 

1. Are you conducting ongoing screening?
The FCA found that 7% of firms did not perform ongoing screening for sanctions, politically exposed persons (PEPs) or adverse media.  

For many firms, screening is highly effective at onboarding, the challenge comes afterwards. 

Customer circumstances change, including:

• New sanctions are introduced 
• Corporate ownership structures evolve 
• Adverse media can emerge long after a relationship begins.

Firms should consider whether their current approach provides sufficient visibility throughout the customer lifecycle rather than simply at the point of entry. 

Effective ongoing screening also relies on maintaining a clear understanding of who ultimately owns and controls the entities a firm is doing business with. As ownership structures change, firms need confidence that beneficial ownership information remains accurate and up to date. This is particularly important where complex corporate structures, indirect ownership arrangements or offshore entities may obscure the true sources of risk. Maintaining accurate reliable, up-to-date beneficial ownership information can help firms apply due diligence more effectively and make better-informed risk-based decisions.

2. Have your AML capabilities kept pace with current market risks?
According to the FCA, half of firms reported no investment in AML systems or controls over the previous two years.  

Financial crime threats continue to evolve, as do regulatory expectations. Yet many organisations face competing investment priorities and growing pressure to demonstrate value from existing technology. 

Rather than approaching AML investment as a compliance exercise, firms should evaluate whether their current systems provide the data quality, workflow efficiency and risk visibility required to support informed decision-making. 

As customer relationships become more complex, AML checks need to do more than support onboarding. Firms are under increasing pressure to verify identities, understand beneficial ownership, screen against sanctions, PEPs and adverse media, and keep due diligence up to date as risk changes over time. This makes data quality, ongoing monitoring and clear audit trails central to an effective risk-based approach. As risk profiles evolve, firms increasingly need connected capabilities that support both customer due diligence and ongoing monitoring throughout the customer lifecycle. This includes the ability to adapt monitoring thresholds and controls as risks change, helping compliance teams respond more effectively to evolving customer behaviour, regulatory expectations and emerging financial crime threats.

3. Are you taking a consistent risk-based approach?
The review highlighted that just over a fifth of firms had either no business-wide risk assessment or an incomplete one, while 18% had no formal customer risk assessment methodology.  

Risk assessments are often regarded as foundational documents. However, their value extends beyond meeting regulatory requirements.

A well-constructed risk assessment framework helps firms prioritise resources, justify controls and demonstrate that decisions are based on a clear understanding of risk. The question is not simply whether a framework exists, but whether it accurately reflects today's customers, products and operating environment.

A risk-based approach should not remain static. As firms identify new threats, customer behaviours or geographic exposures, controls and monitoring strategies should evolve accordingly. The ability to quickly adapt workflows, risk models and review processes can help organisations demonstrate that their financial crime programme is responding to changing risks rather than relying on historic assumptions.

4. Could you confidently demonstrate control effectiveness?
Many firms focus significant effort on implementing controls. Increasingly, regulators also want to understand how organisations test, monitor and evidence those controls.

Management information, governance structures, monitoring programmes and audit trails all play an important role in helping firms demonstrate that financial crime risks are being actively managed rather than simply documented.

Regulatory scrutiny is moving beyond whether firms can evidence that systems and controls exist. Firms also need to demonstrate that they understand how those controls operate in practice, how they are configured and why they are appropriate to the risks being managed. In name screening, for example, this includes understanding how the system is calibrated, how fuzzy matching works, what thresholds are applied and why, and how alert outcomes are reviewed. This helps firms show that controls are not simply documented, but are operating effectively within a proportionate, risk-based framework.

Moving from compliance to confidence
The FCA's findings provide a useful opportunity for firms to benchmark their own frameworks against the wider market and identify areas that may benefit from further review.

For asset managers, alternative investment firms and wealth managers, the challenge is no longer simply implementing controls. It is ensuring those controls continue to reflect changing risks, deliver meaningful oversight and provide confidence to regulators, stakeholders and customers alike.

Watchlist Screening in 2026: UK Regulatory Expectations & Solution Innovation 

Earlier this year, we brought together specialists in watchlist screening, sanctions and regulation to discuss the practical steps firms can take to strengthen their screening controls and respond to evolving regulatory expectations. The recording is particularly relevant for firms reviewing whether their financial crime controls are keeping pace with current risks, and for organisations looking to strengthen how they protect both their business and their customers.