1. What Just Happened – Two Big Signals from the AML World
Global AML auditors are in Canada right now.
Representatives from the Financial Action Task Force (FATF) and global authorities have begun a three-week evaluation of Canada’s AML framework and financial institutions, including executives from major banks and government agencies. This is part of the FATF’s ongoing mutual evaluation process – and it’s drawing intense attention because it follows Canada’s record AML enforcement actions earlier in 2025, including a $3 billion AML fine against a major bank and related criminal cases. The review is expected to conclude by June 2026 and may shape future global AML expectations.
In the UK, the FCA is moving forward on AML supervision reform.
HM Treasury’s consultation on bringing law, accountancy, and professional services under the Financial Conduct Authority’s AML supervision is gathering traction, signaling a shift in how regulators expect compliance to be governed across sectors beyond traditional banks.
2. Why These Developments Matter – Beyond Borders
At first glance, these might feel like “regional updates” – but the implications are global:
AML isn’t just a compliance checkbox – regulators are now evaluating effectiveness over existence.
The FATF’s visit is explicitly focused on how well AML frameworks function in reality – not just whether policies exist on paper. This aligns with recent enforcement trends where regulators focus on execution quality, internal controls, and real-time monitoring effectiveness.
Scope of supervision is expanding.
The UK’s move to bring professional services under FCA supervision reinforces a larger trend: AML oversight will no longer be siloed to banks and financial institutions alone. Professional service providers – lawyers, accountants, trust service providers – are increasingly seen as critical links in financial crime risk chains.
3. What This Means for Your AML/KYC Strategy
If you’re in compliance, risk, QA, or AML operations, these developments should trigger strategic action:
Look beyond your “compliance tick-box” checklist.
Your regulators – now more than ever – want proof of effectiveness. Demonstrate not just that controls exist, but that they work in practice:
- Do your transaction monitoring and SAR processes catch real anomalies?
- Are your CDD/EDD outcomes defensible and documented with rationale?
- Is your QA function capable of challenging assumptions and validating execution quality?
AML governance matters more than policy language.
Regulators are evaluating governance – not just documentation. This includes oversight bodies in your firm, escalation protocols, independence of compliance functions, and how issues are remediated across departments.
Cross-sector exposure must be assessed.
As AML supervision expands into professional services, compliance teams should assess exposure through law firms, accountants, and trust providers used by their clients. If any part of the compliance ecosystem is weak, it’s now visible risk.
4. Five Practical Takeaways for Analysts & Risk Teams
- Document why you made decisions, not just what – regulators increasingly ask for reasoning trails.
- Stress-test your AML controls with real-world scenarios, not just policy compliance.
- Elevate governance reporting – board & senior management must see AML risk as a strategic issue.
- Map extended risk exposure – include professional intermediaries and service providers.
- Prepare for deeper regulators’ scrutiny – with FATF peer reviews happening globally, your yardstick for quality is rising.
5. Final Thought – A Shift in AML Regulatory Expectations
Regulators are no longer asking:
“Do you have an AML program?”
They are now asking: “Does your AML program work – every day, in every corner of your business?”