Regulatory Scrutiny Highlights Gaps in AML Compliance for Platforms and Advisers. A recent Citywire New Model Adviser report reveals that the Financial Conduct Authority (FCA) is intensifying its scrutiny of anti-money laundering (AML) processes within platforms and advice firms. Several firms are currently operating under FCA-imposed voluntary requirement notices (VREQs), which restrict their activities until compliance issues are resolved.
The FCA has emphasized the necessity of robust systems to counter financial crime, cautioning against “tick-box” compliance and over-reliance on third-party tools. Jessica Cath, a financial crime expert at Thistle Initiatives, identified the reliance model—where platforms depend on advice firms for AML checks—as a key area needing improvement. Poor oversight and untested automated tools exacerbate the problem, leaving platforms exposed to significant risks.
To address these challenges, firms are increasingly adopting internal due diligence processes rather than relying on third parties. However, this shift is both costly and may lead to tightened risk appetites, impacting adviser firms and their clients. Platforms have also encountered difficulties when identifying high-risk or non-compliant clients, particularly when these clients are tied to long-term investment products.
How azakaw and j. awan & partners Can Help
This evolving regulatory landscape underscores the importance of implementing comprehensive AML solutions. azakaw, an AI-powered KYC/KYB screening platform, offers a proactive approach to financial crime prevention. By enabling platforms and advisers to enhance due diligence, ensure compliance, and mitigate risks effectively, azakaw and j. awan & partners provide the tools needed to navigate today’s complex regulatory environment with confidence.