2024 AML Highlights and Priorities for 2025: A Global Overview

Key Developments in 2024

United States: Beneficial Ownership Takes Center Stage

• The U.S. marked a historic milestone in AML efforts with the launch of theBeneficial Ownership Information E-Filing System on January 1, 2024. This system, long-awaited, aims to enhance corporate transparency and curb the misuse of legal entities by criminals. Managed by the Financial Crimes Enforcement Network (FinCEN), the registry requires corporations to file detailed ownership information, representing one of the most significant AML reforms in the U.S. in two decades.
• The Treasury Department also focused on closing AML coverage gaps in residential real estate transactions and investment advisers , while modernizing AML program requirements. These efforts underscore the U.S.’s commitment to a more robust AML regime.

United Kingdom: Economic Crime Plan 2 in Action

• The UK’s Economic Crime Plan 2 (ECP2), published in 2023, has been fully operational in 2024. The plan targets money laundering, asset recovery, kleptocracy, sanctions evasion, fraud, and international illicit finance. Key initiatives include expanding the National Crime Agency’s capacity and supporting the introduction of beneficial ownership registries in Crown Dependencies and British Overseas Territories.
• With £400 million in additional funding allocated until the end of the 2025 financial year, the UK has demonstrated a serious commitment to combating economic crime. Financial institutions are now preparing to align their compliance resources with the government’s enforcement priorities.

European Union: Progress Toward Harmonized AML Regulations

• In June 2024, the EU announced a comprehensive AML package, including four legislative instruments aimed at harmonizing AML/counter-terrorism financing (CFT) measures across member states. A key component is the establishment of theEuropean AML Authority (AMLA) , set to become operational in Frankfurt by July 2025.
• The EU also adopted updated Transfer of Funds Regulations in June 2023, clarifying requirements for crypto asset transfers. This reflects the growing importance of digital assets in the financial landscape and the need for regulatory oversight.

FATF: Leadership Change and Focus on High-Risk Jurisdictions

• The FATF saw a leadership transition in 2024, withElisa de Anda Madrazo of Mexico taking over the presidency from T Raja Kumar . Under Madrazo’s leadership, the FATF has emphasized inclusiveness, diversity, and transparency in its governance and standards.
• The FATF continues to identify high-risk jurisdictions with strategic AML/CFT deficiencies. Its October 25, 2024 update to the list of monitored jurisdictions has significant implications for financial institutions, which must now apply enhanced due diligence measures when dealing with entities in these regions.

Challenges and Priorities for 2025

Artificial Intelligence (AI) Regulation

• The increasing use of AI in AML processes presents both opportunities and challenges. While AI can enhance detection capabilities, its lack of transparency, potential biases, and privacy concerns necessitate more codified regulatory requirements.
• Financial institutions will need to standardize data elements, including the use of corporate digital identity (CDI) entities, to maximize AI’s effectiveness while addressing ethical and operational risks.

Beneficial Ownership Implementation

• Although beneficial ownership registries are being established globally, ensuring their accuracy and effectiveness remains a challenge. Cross-border information sharing will require standardized data models, while CDI can enhance verification processes.
• Financial institutions must navigate varying implementation timelines and data quality issues to ensure compliance and combat illicit activities effectively.

Harmonization of Global Standards

• As jurisdictions implement new AML measures, the risk of regulatory fragmentation grows. Technology, particularly automation, will play a pivotal role in aligning diverse regulatory requirements into a cohesive framework.
• Standardized data models and interoperability frameworks will enable financial institutions to map and comply with regional variations while maintaining a unified approach to AML.

Resource Allocation and Automation

• Expanding AML obligations demand optimized resource allocation. Automation will be critical in streamlining repetitive tasks, reducing errors, and enabling scalability, allowing human resources to focus on strategic activities like risk analysis and policy development.
• By lowering compliance costs and improving operational efficiency, automation can help institutions meet growing regulatory demands without compromising effectiveness.

Political Shifts and Their Implications

United States: A Deregulatory Approach Under a Republican Majority

• With the Republican Party controlling the Executive, Senate, and Congress, 2025 may see a shift toward deregulation, including AML rules. The new administration could roll back Biden-era regulations, particularly those finalized late in his term, using the Congressional Review Act.
• Potential changes include easing AML requirements for banks with under $250 billion in assets and altering supervisory practices to adopt a “lighter touch” approach. These shifts could encourage financial institutions to take on greater business risks for higher rewards, though the full implications remain unclear.

Global Implications of Political Changes

• The U.S. political shift could influence global AML efforts, particularly in jurisdictions that align closely with U.S. regulatory standards. Financial institutions must remain agile to adapt to evolving political priorities while ensuring compliance with new and existing regulations.

Conclusion: Navigating an Evolving Landscape

2024 has been a transformative year for AML regulations, with significant progress in corporate transparency, enforcement capacity, and international cooperation. However, as we move into 2025, financial institutions will face increasing complexity, driven by technological advancements, regulatory harmonization efforts, and political shifts.

• Technology and automation will be central to addressing these challenges, enabling institutions to streamline compliance processes and enhance detection capabilities.
• Vigilance and adaptability will be essential as banks navigate evolving threats, regulatory changes, and political dynamics.

The fight against money laundering and financial crime remains a moving target, requiring continuous innovation, collaboration, and commitment from all stakeholders. As the global AML landscape evolves, staying proactive and informed will be key to maintaining momentum and achieving lasting impact.