This month we examine the UK government's latest progress report on Economic Crime Plan 2, explore the Wolfsberg Group's groundbreaking guidance on innovation in suspicious activity monitoring, and analyse OFSI's latest disclosure notice highlighting critical lessons for sanctions compliance.
Story 1: Economic Crime Plan 2 Shows Measurable Progress
The UK government has published its progress report on Economic Crime Plan 2, marking a significant shift towards data-driven assessment of financial crime prevention efforts.
Moving Beyond Intentions to Outcomes
Since its launch in 2023, Economic Crime Plan 2 has sought to bolster joint public and private sector efforts in cutting economic crime, protecting national security, and supporting legitimate economic growth and competitiveness.
The plan introduces an "outcomes framework" that functions as a scorecard to track progress through measurable results rather than good intentions. This represents a fundamental change in how the UK assesses the effectiveness of its financial crime prevention measures.
Concrete Results in Money Laundering Prosecutions
The data reveals encouraging trends in enforcement activity. In 2024, there were 6,845 prosecutions for money laundering, representing a 36% increase from the previous year. Convictions reached 3,756, marking a 7% increase.
These figures demonstrate that more cases are reaching court and more criminals are being convicted. The justice system is demonstrably tightening its approach to financial crime, with tangible results following years of policy development and resource allocation.
Acknowledging Current Limitations
The government demonstrates refreshing transparency by admitting significant data gaps remain. Critical questions still lack clear answers:
How effectively is the AML system working within banks? What practical impact will new legislation, such as the Economic Crime and Corporate Transparency Act (ECCTA), have on financial crime prevention?
These acknowledgments underscore that whilst progress is evident, comprehensive assessment requires continued development of measurement capabilities.
What This Means for Financial Institutions
This represents a long-term strategy where some measures won't show results until 2028. Businesses and regulators must maintain consistent effort before the full effectiveness of recent reforms becomes measurable.
The UK is demonstrably improving at pursuing criminals, but this remains very much work in progress. Measurable progress proves vital for maintaining a clear and transparent economy whilst encouraging legitimate investment. Trust in UK markets represents a national asset, and tackling financial crime concerns both security and economic growth.
Story 2: Wolfsberg Group Drives Innovation in Suspicious Activity Monitoring
The Wolfsberg Group has released groundbreaking guidance on innovation in monitoring for suspicious activity, urging financial institutions to adopt intelligent and explainable systems for more effective detection capabilities.
A Step Change in Industry Guidance
Building on guidance issued in July 2024, this latest Wolfsberg statement represents a significant evolution, combining risk-based approaches with technical innovation whilst emphasising the critical importance of strong governance, validation, and regulatory support.
The guidance establishes three core pillars for responsible innovation:
- Transition and Validation: Ensuring new systems undergo rigorous testing before implementation whilst maintaining operational continuity during technological transitions.
- Balancing Model Risk with Financial Crime Risk: Recognising that imperfect models may still provide superior detection capabilities compared to legacy systems, provided risks are properly managed.
- Explainability: Demonstrating transparency in coverage and effectiveness to satisfy both internal governance requirements and regulatory expectations.
Practical Benefits and Industry Impact
The benefits of this approach extend far beyond theoretical improvements. Financial institutions implementing these principles can expect reduced false positives, more actionable alerts, and consequently higher-quality Suspicious Activity Reports (SARs).
This guidance carries particular weight because it emerges from practical experience. The Wolfsberg Group comprises 12 global banks with extensive real-world implementation experience. Their engagement with regulators, Financial Intelligence Units, and academic institutions ensures the guidance reflects both regulatory expectations and operational reality.
Call to Action for Financial Institutions
This report should prompt immediate self-assessment across several critical areas:
- Review Existing Systems: Examine current rules, thresholds, and alert mechanisms for effectiveness and efficiency. Focus particularly on areas generating high false positive rates or consistently low-quality alerts.
- Assess Legacy Infrastructure: Identify systems that could benefit from automation, artificial intelligence, or other technological enhancements.
- Strategic Planning: Consider assessment results alongside business plans to determine whether innovation opportunities align with organisational objectives and risk appetite.
The vast majority of firms continuously seek to improve effectiveness, whether supporting growth, enhancing efficiency, delivering better customer experiences, or reducing fraud losses. This guidance provides a structured process for embracing new technology thoughtfully and systematically, demonstrating that transitions away from legacy systems can be managed within acceptable risk parameters.
Staying Ahead of Criminal Innovation
Criminal organisations fully exploit advancing technology for illicit purposes. Financial institutions must embrace innovation to maintain competitive advantage in detection and prevention capabilities. The Wolfsberg guidance offers a framework for responsible advancement that balances innovation with risk management.
Story 3: OFSI Disclosure Notice Highlights Sanctions Screening Vulnerabilities
OFSI has issued a fresh disclosure notice regarding sanctions breaches, offering critical lessons for financial institutions about the integration of technology and operational processes.
The Vanquis Case Details
The latest OFSI disclosure notice reveals a case with striking similarities to previous breaches, demonstrating recurring vulnerabilities in sanctions compliance frameworks.
Vanquis allowed a designated person access to an account despite having screening systems in place. Delays in processing alerts enabled the designated person to withdraw cash and complete transactions before the bank restricted the account.
A Missed Opportunity for Prevention
Perhaps most concerning was that OFSI forewarned Vanquis that a suspected customer was due to be designated the day prior to the actual designation. This advance notice should have placed the bank on high alert for potential matches through their screening processes.
The breach occurred despite this warning, suggesting systematic weaknesses in the bank's ability to act on intelligence and coordinate between screening technology and operational response capabilities.
Lessons for Technology Implementation
This case reinforces that effective sanctions compliance requires seamless integration between technology solutions and operational processes. Sophisticated screening systems provide little protection if manual processes introduce delays or gaps in response capabilities.
Financial institutions must ensure that their technology applications in sanctions and financial crime compliance operate without compromise from manual processing bottlenecks. The most advanced screening capabilities prove ineffective if operational procedures cannot support timely action on alerts and intelligence.
Key Takeaways for Financial Crime Professionals
These developments collectively reinforce several critical themes for the industry:
- Measurement Drives Improvement: The Economic Crime Plan 2 progress report demonstrates that data-driven assessment of financial crime prevention efforts enables more effective policy development and resource allocation.
- Innovation Requires Structure: The Wolfsberg guidance shows that technological advancement in suspicious activity monitoring succeeds when supported by robust governance frameworks and clear validation processes.
- Integration Matters: The OFSI disclosure highlights that effective compliance depends on seamless coordination between technology solutions and operational procedures.
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 measurement, innovation, and operational excellence 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 September 2025 episode of The FinCrime Connection, hosted by Claire and Phil from Jade ThirdEye. Claire brings over 20 years of financial crime expertise from her experience in financial services, while Phil represents our commitment to helping customers navigate these complex regulatory landscapes.