Enhanced Due Diligence (EDD) plays a crucial role in strengthening the customer due diligence process for UK firms. While standard due diligence provides a foundation for understanding clients and mitigating risk, EDD goes further—requiring a deeper level of scrutiny for higher-risk individuals and entities. It is an essential tool in helping firms meet their regulatory obligations, protect against financial crime, and maintain the integrity of the financial system.

Understanding the source of wealth of an individual is a vital component of effective customer due diligence, particularly within the UK’s regulatory framework. Firms are required to go beyond surface-level checks and adopt a structured methodology to assess how a client has legitimately accumulated their wealth. This process not only ensures compliance with anti-money laundering (AML) obligations but also strengthens trust, transparency, and risk management across financial services.

Economic crime is a growing threat to the UK’s financial sector, with fraud, money laundering, cybercrime, and terrorism financing undermining trust, stability, and economic security. As criminals exploit digital advancements and regulatory gaps, financial institutions face increasing risks, from reputational damage to severe financial penalties. This article explores the impact of economic crime, the rising cyber threat, and the urgent need for stronger compliance, cybersecurity, and global co-operation to protect the UK’s financial services.

The UK financial services sector has faced increasing scrutiny over financial crime in recent years, with regulatory authorities imposing significant fines on institutions failing to comply with anti-money laundering (AML) and financial crime prevention regulations. Analysing both the sum of fines by reason and the number of fines by financial crime category, key trends emerge that highlight shifting enforcement priorities, the biggest compliance risks, and the evolving nature of financial crime oversight