Five-year national risk assessment of money laundering is carried out in the UK for the first time
The HM Treasury recently published the National Risk Assessment of Money Laundering and Terrorist Financing 2025, marking the fourth comprehensive evaluation of such risks in the UK since 2020. This assessment provides an overview of the current risks, actions taken, and challenges in strengthening the UK's financial system against financial crime.
Since 2020, expanded regulations have been implemented to address new activities related to money laundering and financial crime. These regulations affect electronic money institutions, e-money trading, and crypto activities, driven by tightened Anti-Money Laundering (AML) rules under updated legislation and EU-wide AML reforms. The regulations include enhanced due diligence and reporting requirements for these sectors.
The risk of money laundering through misuse of UK corporate structures, such as the use of front companies and cash-intensive businesses, remains high. Vulnerable sectors, as highlighted by the NRA 2025, provide guidance for firms, particularly those in regulated sectors and subject to money laundering supervisions.
Organisations are urged to take a proactive approach to AML risk assessment and ensure their detection systems and policies are up-to-date and adequate to mitigate threats. The latest NRA sets out the progress made since the start of the decade, the action taken to address risks, and the challenges that remain.
The risk from cash-based money laundering through smuggling, cash-intensive businesses, and money mule activity remains high. Rapid adoption of new financial technologies has contributed to increasing money laundering risk, including electronic money institutions, payment service providers, cryptoassets, and the use of artificial intelligence (AI).
In the property sector, property purchases remain an attractive method for laundering illicit funds, particularly prime and super-prime residential property. The UK government aims to bring certain cryptoasset activities within the regulatory framework of the Financial Services and Markets Act to reduce money laundering risk.
The risk score for cryptoasset service providers has increased from medium to high since 2020, due to criminal use of cryptoassets and increased legitimacy by the general public. Similarly, the money laundering risk score for estate agency businesses has slightly risen due to vulnerabilities such as increased complexity of ownership and deal structures.
However, the money laundering risk for letting agency businesses has decreased from medium to low, reflecting improved understanding and implementation of Money Laundering Regulations (MLR) requirements. Retail banking, with its scale, high-transaction volumes, and digital onboarding risks, including AI-enabled identity fraud, continues to pose a high level of money laundering risk.
Shifting geopolitical context and sanctions evasion continue to pose a high level of money laundering risk in the UK. Organized criminal groups continue to target financial services firms. The UK government is expected to subject EMIs and housebuilders who will be EABs when selling jointly with other third parties to continuing enhanced scrutiny.
The assessment supports the UK's compliance with the requirements of the Money Laundering Regulations and its obligations as a member of the Financial Action Task Force. The UK government's efforts to combat money laundering and financial crime are ongoing, with a focus on enhancing regulations, improving detection systems, and educating businesses on AML risks.
