The AML Analyst

May 21, 2026

On May 14th 2016, Nikhil Rathi, the chief executive of the FCA, delivered a speech at the FCA’s financial crime conference, highlighting the evolving landscape of financial crime, with technological advances increasing the volume, speed, and globality of it. He questions the current model of financial crime prevention, with the separation of financial services from national security.

He questions whether this model remains effective, utilising a whack-a-mole analogy, which accurately captures the financial crime prevention landscape. His solution revolves around a system-wide effort that focuses on greater transparency, advancing technology, and deeper coordination between consumers, financial services, regulators, law enforcement, and across borders. 

Rathi’s idea fundamentally changes how financial crime prevention will occur, but it is the best approach to it. Information sharing is key to preventing financial crime, and this will only improve if the barriers between firms and between firms and regulators are broken down. With the current approach, many firms handle their own information and file their SARs, but are never able to gain a full scope of the actual threat due to the differences in systems or the assumption that others are filing their SARs at the same reasonable time.  A push towards private-to-private sharing would not only help firms gain a greater picture of potential criminal networks but also vastly improve the efficiency of SARs, which would help law enforcement use resources more effectively. 

In addition, with regulators, specifically the FCA, pushing for a more outcomes-based model, the information sharing between private-to-private firms will only help improve the financial crime systems between them, as the importance of this is that they aren’t fighting against each other for who is the most effective in preventing financial crime, but instead should be working as a unit and sharing the responsibility to prevent it. What this would look like would be firms sharing tools and information among themselves to improve systems and increase their ability to detect financial crime typologies and collaborate to improve the information shared through SARs, enabling investigations to be run more smoothly.

Rathi made an interesting point on the first line of defence (1LOD). While traditionally, the 1LOD was seen as the customer-facing business that collects KYC information, Rathi suggests it is actually the consumers. The reasoning behind this, in terms of fraud and scams, is that they have the ability to question suspicious investments, but to do so, they require the right knowledge. Through partnerships between regulators and private firms, there is an opportunity to offer the right tools to consumers to prevent harm before it starts. I believe this is the overall encompassing factor for Rathi’s fundamental switch in the operating model, and the right approach to take. By seeing consumers as the 1LOD, firms and regulators can have a greater presence in investigating and preventing emerging threats, as the push of education towards consumers can help prevent known typologies from affecting them, and once again, better improve the allocation of resources in the fight against financial crime. 

Rathi does, however, bring up a critical point regarding the FCA’s resources not being able to chase every lead, and will require prioritisation. While I don’t believe this is an issue for firms and investigators, as the risk-based approach is nothing new in the financial crime field, and is the norm, the issue arises for consumers. Consumers may report a variety of different issues that the FCA will have to deal with, but these may be of lower priority. This is where stronger collaboration among all cogs in the financial crime prevention system is important, as it can aid the FCA and its partners in reducing complexity and large volumes of information. 

Do you think a greater information-sharing system between private-to-private firms would better enable your firm to prevent financial crime?

Links: Rathi’s Speech: https://www.fca.org.uk/news/speeches/working-together-against-financial-crime