UK Considers Raising Threshold for Suspicious Activity Reports, Says Top AML Official

The UK government is considering changes to the threshold for when banks and financial institutions should file suspicious activity reports (SARs), one of the country’s top anti-money laundering (AML) officials has revealed. Adrian Searle, director of the National Economic Crime Centre (NECC) at the National Crime Agency (NCA), discussed the potential reform during his speech at the 'International Anti-Financial Crime Summit 2024' in London.

Searle acknowledged concerns within the financial sector about the current SARs regime, explaining that many analysts feel the volume of reports being submitted does not lead to effective enforcement action.

“We’re looking at the SARs regime, the guidance we’ve given on what needs to be reported as a SAR,” he stated. “We’re looking at whether we should change the threshold for suspicion, as we want to have the most impact. And there is a suspicion that some of the things being reported on aren’t adding value.”

Financial institutions in the UK frequently rely on transaction monitoring systems, which automatically generate thousands of SARs annually. However, Searle noted that only a small percentage of these reports, around 5%, result in investigations or are pursued by regulatory bodies and law enforcement agencies.

As the UK government seeks to make SARs more efficient and impactful, Searle also raised alarms about the growing threat of "digitally enabled fraud." He warned that fraudsters are increasingly turning to advanced technologies like artificial intelligence (AI) to carry out scams.

“We’re seeing uses of AI where you have the likes of Nigerian fraudsters using face-swapping technology,” Searle revealed, pointing to the rising use of deepfakes – highly realistic, digitally altered videos that can mimic a person’s appearance and speech.

He referenced a recent case involving London-based engineering and design firm Arup, which was targeted by a deepfake scam in Hong Kong. In that incident, an employee was deceived by an AI-generated video call and sent HK$200 million (approximately $25 million) to criminals.

“This is happening. It’s not yet at great scale, but it’s happening,” Searle emphasized.

Alongside the rising threat of AI-driven fraud, Searle underscored the scale of illicit finance flowing through the UK. He pointed to NCA figures suggesting that the country is likely one of the world's primary hubs for money laundering, with as much as £100 billion being laundered through the UK annually.

“We’re looking at, at least £100 billion laundered in the UK every year,” he said. “We also have losses to individuals and businesses of £2 billion every year, which I think is probably a massive under-estimate.”

Searle’s comments highlight the UK’s dual challenge of tackling the surge in technology-enabled financial crime while improving the effectiveness of its SARs regime, as it aims to curb money laundering and protect businesses and individuals from fraud.

By fLEXI tEAM