By Marker AI — 2026 AML Insights Series

The UK’s AML landscape is expected to shift significantly in 2026, with the government signalling a move toward clearer expectations, more consistent supervision, and a sharper focus on high-risk activity. Some elements are already confirmed, such as Companies House identity verification and the consolidation of AML supervision, while others are emerging from consultations and policy direction.

For professional firms, the message is clear: CDD, EDD, and onboarding workflows will need updating as the reforms take shape.

Below is a summary of the changes firms should be preparing for based on the government’s published direction.

1. A clearer definition of a business relationship
The government has indicated that it intends to clarify the long-standing ambiguity around when CDD is required. A more practical definition of a business relationship is expected to form part of the 2026 reform package.

What this means for firms:
• Fewer borderline cases
• More predictable onboarding triggers
• Reduced risk of under or over applying CDD

Even a modest clarification will have a meaningful operational impact.

2. More practical guidance on source of funds checks
Source of funds has been one of the most inconsistently applied areas of AML. The government has signalled that it intends to issue more practical, scenario based guidance to support firms in applying SOF requirements proportionately.

What firms should expect:
• Clearer expectations on documenting SOF rationale
• Proportionate but meaningful evidence
• Alignment between SOF, client profile, and transaction

Supervisors are likely to expect stronger audit trails in this area.

3. Digital identity verification guidance
Digital onboarding is now mainstream, and the government has already committed to strengthening identity verification through Companies House reforms. Additional guidance for regulated firms on digital identity verification is expected to follow.

What firms should prepare for:
• Ensuring digital ID tools meet emerging standards
• Maintaining human oversight for higher risk clients
• Updating onboarding policies to reflect hybrid verification models

This is a major opportunity for firms to modernise their processes.

4. A more targeted approach to EDD
Consultation feedback suggests the government intends to refine EDD triggers so that enhanced measures are applied more intelligently.

Likely direction:
• EDD focused on unusually complex or high risk transactions
• Routine complexity no longer triggering EDD by default
• Firms required to justify why a transaction is unusually complex

This aligns with the UK’s broader shift toward risk based supervision.

5. High risk country rules
The UK continues to align with FATF’s Call for Action list. The government has indicated that future reforms may tighten the link between EDD and the highest risk jurisdictions.

Implications for firms:
• Fewer automatic EDD cases
• More precise risk assessments
• Closer monitoring of FATF updates

This would reduce unnecessary EDD while strengthening focus on genuine high risk exposure.

6. Pooled client accounts
The government has acknowledged long standing uncertainty around pooled client accounts and has signalled that clearer expectations will form part of the reform package.

For law firms:
• More clarity on when underlying clients must be identified
• Better alignment with real world practice

This is a practical fix to a persistent operational challenge.

7. Heightened expectations for risk based judgement
Supervisors including the SRA, ICAEW, and HMRC have already emphasised that firms must be able to demonstrate:
• Clear risk scoring
• Documented rationale for decisions
• Alignment with the firm wide risk assessment

The direction of travel is unmistakable: if it is not documented, it did not happen.

What firms should do now
To prepare for the 2026 reforms, firms should begin:
• Updating CDD and EDD workflows
• Refreshing AML training for all staff
• Reviewing digital onboarding tools
• Updating the FWRA to reflect emerging risk triggers
• Strengthening documentation and audit trails

Firms that act early will find the transition smoother and will be better positioned for supervisory reviews.

👉🏻 Click here for a downloadable resource to help solicitors and accountants implement the new 2026 CDD standards with clear, actionable steps.