On 2 August 2017, the FCA published a webpage in the light of research it commissioned relating to new technologies and firms’ anti-money laundering (AML) compliance.

The FCA commissioned consultants to carry out a survey on emerging technologies with the potential for enhancing financial firms’ work to detect and prevent money laundering, and for helping make the UK a hostile environment for criminals’ money.

It has subsequently published the consultant’s report (dated 31 March 2017), which sets out the findings of three months of research that included over 40 interviews with regulated firms, technology providers, and other bodies.

The FCA has published the report as it believes it will be of interest to financial firms who are considering the use of new technologies in relation to their AML compliance efforts. It states that nothing in the report represents guidance.

The report sets out respondents’ views on topics including the following:

• What are the key functions of new and emerging technologies related to AML compliance, and how can they aid compliance activities?
• What challenges do firms face in introducing new technologies?
• What good practice examples and lessons are available for firms considering new compliance technologies?
• What steps could the FCA take to encourage more innovation in anti-money laundering compliance?

Appendix 4 to the report sets out a table of the technologies used by firms in relation to AML compliance.

These include biometrics such as

• voice recognition,
• blockchain (that is, using distributed ledger-based database technology),
• video know-your-customer checks and
• geolocation (which is using a customer’s location data to determine a behavioural profile).

The report concludes that new and emerging technologies have genuine potential to transform AML compliance, both in helping to prevent money laundering and in reducing the cost of compliance. However, it also notes that substantial barriers to widespread adoption exist, which may continue to limit the progress of ongoing innovation in AML compliance.

The FCA is working with the government to consider what lessons it can learn from the report’s findings and will provide further updates in due course.