AML/CFT Supervision Report 2023-24

HMT Supervision Report: Strengthening AML Gatekeeping & Risk Assessment in 2023-24

A strong Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) supervision framework is essential to combat financial crime. The latest HMT Supervision Report (2023-24) highlights key trends in gatekeeping and risk assessment, shedding light on how the UK is strengthening its defenses against illicit finance.

Declining Supervised Population & Rising Scrutiny

As of 2023-24, the total number of supervised businesses in the UK stood at 94,937, reflecting a decline from 101,098 in 2021-22. This reduction indicates a more stringent registration process, ensuring only compliant businesses operate within the regulated sector.

Risk Categorization: More Businesses Deemed Low-Risk

• High-risk businesses decreased from 11% (2021-22) to 9% (2023-24).

• Medium-risk businesses saw a sharper decline from 43% to 31%.

• Low-risk businesses increased from 46% to 60%, showing improved compliance and better risk management.

Increased Rejections & Tightened Supervision

Supervisors received 13,058 applications for AML supervision in 2023-24, out of which 954 were rejected—a significant increase from previous years. This reflects a more rigorous gatekeeping approach aimed at preventing businesses with weak compliance measures from entering the regulated space.

Sector-Wise Supervision Breakdown

• Financial Conduct Authority (FCA) supervises around 17,200 firms, including retail banking and cryptoasset businesses.

• His Majesty’s Revenue and Customs (HMRC) oversees 36,096 businesses, with a focus on estate agencies, money service businesses, and trust service providers.

• The Gambling Commission (GC) supervises 247 casinos, both online and land-based.

• Professional Body Supervisors (PBSs) regulate 33,830 accountancy and 7,564 legal firms.

Crypto Firms Face Higher Scrutiny

The FCA rejected or forced withdrawals of 86% of cryptoasset business applications, citing inadequate AML frameworks. This signals tighter regulation of virtual asset providers, which remain highly vulnerable to money laundering risks.

What Lies Ahead?

The UK government is reviewing the Money Laundering Regulations (MLRs) to further improve effectiveness. With ongoing reforms and FATF evaluations scheduled for 2028, supervision is expected to become even more robust.

The latest trends reflect a proactive approach to gatekeeping, ensuring only businesses with strong AML compliance measures remain operational.

Read the full report here.

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