Navigating the New AML Landscape: Technical Solutions for Accountancy Practices

In the world of finance, Anti Money Laundering (AML) regulations remain a cornerstone in the fight against financial crime. The UK’s AML regulations for 2024 have introduced updates that accountancy practices must navigate to ensure compliance and avoid severe penalties.  

Understanding the 2024 AML Regulations:   

The latest AML regulations in the UK emphasise a more proportionate approach to customer due diligence, enhanced coordination within the financial system, and clearer guidance on regulatory scope. With the inclusion of new definitions for “high-risk third countries” and a focus on the cost of compliance, the regulations demand a robust response from accountancy practices.  

The changes to the UK's AML regulations in 2024 primarily involve strengthening existing standards rather than introducing entirely new regulations. Here are some of the highlights:  

• Expansion of Regulated Sectors: The scope of businesses subject to AML regulations has been broadened to include additional sectors such as art dealers, virtual asset service providers, and certain professional services. 

• Enhanced Due Diligence (EDD): Strengthened requirements for Enhanced Due Diligence, particularly for customers and transactions involving high-risk jurisdictions or politically exposed persons (PEPs). 

• Beneficial Ownership Transparency: Increased emphasis on transparency regarding beneficial ownership information. Companies must provide more detailed and up-to-date information about their ultimate beneficial owners. 

• Technology and Data Analytics: Encouragement and guidance for the use of advanced technologies and data analytics tools in detecting and preventing money laundering activities. 

• Reporting Requirements: Enhanced reporting obligations, including more stringent timelines and more comprehensive reporting requirements for suspicious activities. 

• Penalties and Enforcement: Increased penalties for non-compliance, including higher fines and longer prison sentences. Enhanced enforcement measures and more rigorous oversight by regulatory bodies. 

• Training and Awareness: Mandated ongoing training programs for employees in regulated sectors to ensure they are up-to-date with AML requirements and best practices. 

• International Cooperation: Strengthened international cooperation and information-sharing mechanisms to combat cross-border money laundering and terrorist financing. 

• Environmental Crime Focus: New provisions to address money laundering linked to environmental crimes, such as illegal wildlife trade and deforestation 
  

The Cost of Non-Compliance:   

Recent case studies have highlighted the repercussions of non-compliance. From financial penalties to criminal prosecution, the risks are substantial. Accountancy practices have faced fines and disciplinary actions for failing to implement adequate AML policies, conduct due diligence, and provide necessary training.  

What this means to you: 

The AML process is seen as overly complex, requiring substantial time and effort to ensure compliance. Couple that with the administrative burden especially for small and mid-tier firms means that while accountants understand the importance of AML regulations in combating financial crime, the associated challenges and burdens often lead to frustration and dissatisfaction with the process. 

How to overcome these challenges 

The new regulations for 2024 are quite explicit in their recommendation for accountancy practices to embrace advanced technologies and data analytics to not only streamline the process, but to help firms to stay compliant.  

T-Tech have developed Practice Gateway to act as the digital front door for all interactions between accountants and their clients. This includes the AML process. With Practice Gateway you can digitalise the whole process: 

• End-to-end KYC platform  
• Integrates with SmartSearch & Companies House
• Automatic reminders
• Digital ID verification
• Simple reporting
• Integration with all your back-end processes & software
• Plus much more
  

High street banks have successfully integrated this type of technology into their processes to allow clients to easily upload documents and identification, so why shouldn’t accountants?  

If conducting AML checks in your firm is a time-consuming, manual process that consumes valuable time and resources, using a software platform like Practice Gateway can help to get that time back and free up those resources to focus work that really adds value to your clients.  

To find out how Practice Gateway can supercharge your AML processes, book a demo today to see it in action.