This month, we examine critical updates from OFSI on sanctions list consolidation, a significant NCA enforcement operation in Northern Ireland, the FCA's support for digital identity systems in financial crime prevention, and forthcoming changes to the Money Laundering Regulations.
Story 1: OFSI Consolidated List Closes — A New Era for Sanctions Compliance
The Office of Financial Sanctions Implementation has announced a significant change to how sanctions designations will be published from January 2026. After 28 January 2026, the OFSI Consolidated List of Asset Freeze Targets will close, and the UK Sanctions List will become the single, authoritative source for all UK sanctions designations.
Practical Implications for Financial Crime Teams
Financial institutions should review their sanctions screening procedures now to ensure systems are configured to access the UK Sanctions List directly. Any automated processes or manual procedures referencing the OFSI Consolidated List will need updating before the transition date of 28 January 2026.
Story 2: NCA Money Laundering Operation Seizes £2.6 Million in Northern Ireland
The National Crime Agency has reported arrests in Northern Ireland as part of an ongoing money laundering investigation. Business and residential properties were searched, with cash and electronic devices seized. The NCA later confirmed that cash totalling £2.6 million was seized in the operation.
Story 3: FCA Backs Digital Identity for Financial Crime Prevention
At its annual public meeting on 9 October, the FCA made clear its support for digital identity systems, positioning them as potentially transformative tools for reducing fraud and preventing financial crime. Senior FCA leaders articulated how digital IDs could strengthen identity verification, enhance fraud prevention capabilities, and help suppress illicit financial flows.
Beyond Convenience
The FCA's stance moves digital identity from a customer convenience feature into a serious discussion about financial crime infrastructure. If implemented effectively, digital identity systems could address persistent vulnerabilities in customer onboarding processes whilst reducing friction for legitimate customers.
Balancing Innovation and Concerns
However, the FCA also acknowledged significant tensions that must be resolved. Questions around privacy, civil liberties, the degree of compulsion in any ID scheme, and integration with existing AML and KYC obligations all require careful consideration. These concerns are legitimate and must be addressed thoughtfully as digital identity proposals develop.
Looking Ahead
The digital identity conversation is gaining real momentum. It's increasingly seen not only as a consumer convenience but as an enforcement and prevention tool in AML and fraud. Firms should be thinking ahead: how would a digital ID system integrate with their KYC and customer onboarding processes? What changes might be needed?
The Need for Clear Guidance
As digital identity proposals develop, the FCA's narrative and guidance will be crucial. If this initiative progresses, financial institutions will need clear direction on how to operationalise digital identity systems within their existing frameworks.
Story 4: Looking Ahead to Money Laundering Regulations Changes
The consultation period for proposed changes to the Money Laundering Regulations closed on 30 September, and over the coming weeks we should expect confirmation about which proposals will make it into the final legislation. The outcomes will shape compliance requirements for financial institutions across multiple sectors.
Risk-Based Approaches and Industry Concerns
Whilst much of the proposed change moves towards more risk-based approaches, some proposals have generated significant concerns. The Law Society has raised particular objections to changes around pooled client accounts, arguing that requiring full customer due diligence on all client accounts, regardless of risk level, would be disproportionate and lead to increased costs and delays for clients.
Calls for Proportionality
The Law Society is calling for more evidence to support certain proposals and suggests that regulators should focus on improving existing processes rather than requiring costly overhauls of current practices. Their submission emphasises that the Money Laundering Regulations were primarily designed with high street banks in mind, and argues that the regulations should incorporate proportionality to ensure requirements remain appropriate for small firms.
What This Means for Financial Institutions
The coming weeks will provide clarity on which proposals proceed and which may be modified or dropped. Financial crime professionals should monitor developments closely, particularly around areas relevant to their organisation's business model and customer base.
Key Takeaways for Financial Crime Professionals
These developments collectively highlight several important themes:
Infrastructure Changes Require Preparation: The consolidation of sanctions lists and potential introduction of digital identity systems will require operational adjustments. Planning ahead reduces implementation pressure and minimises disruption.
Enforcement Demonstrates Impact: The NCA's Northern Ireland operation, which resulted in the seizure of £2.6 million, shows that money laundering enforcement remains a priority across all UK jurisdictions, validating the importance of robust detection and reporting systems.
Risk-Based Approaches Demand Sophistication: Whether through Money Laundering Regulations changes or digital identity integration, the regulatory direction emphasises targeted, intelligent approaches to financial crime prevention.
Financial crime professionals should view these developments as opportunities to strengthen organisational capabilities whilst contributing to broader industry efforts to combat financial crime. The convergence of regulatory change, technological innovation, and enforcement success provides a framework for continuous improvement in financial crime prevention.
Join us next month for more insights from The FinCrime Connection, brought to you by Jade ThirdEye.
This blog is based on the October 2025 episode of The FinCrime Connection UK, hosted by Claire and Phil from Jade ThirdEye. Claire brings extensive expertise in financial crime prevention as Global Financial Crime Regulatory Specialist, whilst Phil serves as Business Development Manager for Jade ThirdEye in the UK, helping organisations navigate complex regulatory landscapes.