What the FCA Expects: 10 AML Training Requirements You Can’t Ignore
The Financial Conduct Authority (FCA) continues to emphasise the importance of robust and bespoke AML and financial crime training for firms operating within regulated sectors. Recent fines and publications highlight ten key training requirements that firms must meet to ensure their employees are adequately prepared to combat financial crime effectively. These expectations stress the importance of a tailored approach that aligns with a firm’s business model, risks, and product offerings – including comprehensive Anti-Money Laundering (AML) training and broader financial crime training covering all predicate offences such as fraud, bribery, corruption, tax evasion, sanctions, proliferation financing and terrorism financing.
Key AML Training Requirements and Expectations from the FCA:
1. Go Beyond the Basics
Training should not be limited to generic information; it must be enriched with real-world examples and storytelling that make risks tangible for employees. AML training should include real-life case studies on money laundering, while broader financial crime training should address predicate offences such as fraud, bribery, sanctions, terrorism finance and cyber-enabled crime.
2. AML Training needs to be Tailored
Programmes should be adapted to reflect the specific AML and financial crime risks, products, and regulatory challenges of the firm, ensuring ongoing relevance. AML training should be risk-based, covering high-risk typologies relevant to the firm, while financial crime training should address the full spectrum of predicate offences based on the firm’s operations.
3. Role-Specific Onboarding Training
New customer-facing employees must complete financial crime and AML training before interacting with customers to mitigate immediate risks. This should include AML fundamentals (e.g., KYC, transaction monitoring) and awareness of predicate offences such as fraud indicators and sanctions including proliferation financing.
4. Testing and Assessment
Staff understanding of AML risks, financial crime typologies, and reporting procedures should be regularly tested. Results should be used to determine both individual training needs and the effectiveness of the broader financial crime training programmes. Testing should include scenario-based exercises on detecting and escalating financial crime risks across different predicate offences.
5. Practical Lessons and Case Studies
Training should incorporate hands-on examples, industry case studies, and simulated scenarios specific to AML and financial crime. Employees should learn to identify money laundering techniques (e.g., layering and structuring) as well as red flags for fraud, market abuse, and corruption.
6. Innovative and Awareness-Based Training
Firms should integrate AML and financial crime training into broader financial crime awareness campaigns, using innovative techniques such as interactive e-learning modules, case studies, and gamification to enhance engagement. Regulatory changes related to AML, sanctions, and fraud prevention should be incorporated into ongoing awareness campaigns.
7. Accountability and Compliance Understanding
Employees must clearly understand their responsibilities under AML regulations and financial crime laws. This includes knowledge of internal policies, procedures, and regulatory obligations regarding predicate offences such as bribery, tax evasion, and sanctions compliance.
8. Role-Specific Application
AML and financial crime training should be tailored to employees’ specific roles and responsibilities. For example:
- Frontline staff should focus on identifying suspicious transactions, customer due diligence (CDD), and fraud detection.
- Risk and compliance teams require detailed knowledge of regulatory obligations, sanctions compliance, and internal investigations.
- Senior management and board members should receive training on corporate governance, accountability, and regulatory expectations in financial crime risk management.
9. Enhanced Training for High-Risk Positions
Employees in high-risk roles, such as compliance officers, MLROs, Nominated Officers, senior management, and those dealing with high-risk customers, should receive enhanced financial crime training covering:
- AML frameworks and risk-based approaches.
- Bribery and corruption risks (including corporate liability).
- Fraud and cyber-enabled financial crime.
- Sanctions compliance and enforcement case studies.
- Terrorism financing.
- Emerging risks such as the misuse of virtual assets and trade-based money laundering.
10. Training Records and Audit Trails
Firms must maintain clear records of AML and financial crime training completion, including attendance logs, certifications, and evidence of periodic refresher training. Regulators expect firms to demonstrate a proactive approach to keeping staff updated on new financial crime threats and regulatory changes.
Conclusion
AML training is a critical component of an effective financial crime prevention framework, but it must be complemented by broader financial crime training that covers all predicate offences. The FCA expects firms to move beyond a check-the-box approach and deliver dynamic, engaging, and risk-focused training that ensures employees are equipped to identify and mitigate financial crime risks effectively.
Next Steps
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Reference Materials:
- Financial Crime Guide: A Firm’s Guide to Countering Financial Crime Risks (FCG)
- FCA Thematic Review 2025: Assessing and Reducing the Risk of Money Laundering Through the Markets
