A new report from Kyckr suggests data deficiencies were a contributing factor to 68% of Financial Conduct Authority (FCA) enforcement cases for anti-money laundering (AML) non-compliance between 2020 and 2025. The report, “The Data Blind Spot: Uncovering a Major Cause of UK AML Fines” analyses AML failings in UK financial institutions.
While many FCA enforcement actions involve multiple root causes, including governance, culture, and control design. The report examines 22 FCA Final Notices totalling over £430 million in fines, which formed 68% of cases. Data deficiencies were a material contributing factor, often acting as a secondary or symptomatic cause of wider control issues.
The report outlined these deficiencies, including outdated records, missing customer information, and reliance on self-disclosures without independent verification. This marks a clear regulatory shift.
The FCA is no longer satisfied with firms having policies “on paper.” Enforcement action now focuses on whether institutions can, in practice, obtain, verify, and continuously update accurate customer information. Kyckr is a provider of global company registry data.
Key categories for data failure
The report identifies four main categories of data failure, each highlighting a consistent pattern and the root causes of information gaps.
- Outdated and missing information – a contributing factor to 45% of fines. This included a reliance on outdated Politically Exposed Persons (PEPs) and investor lists. In addition to the failure to collect sufficient customer information to contextualise transactions.
- Failure to identify the ultimate beneficial owner (UBO) of a given entity is a contributing factor to 32% of fines. This included not knowing who ultimately controls an entity – and building an ownership map from that. This enables financial crime professionals to “build the story” of an entity into a bigger picture.
- Weak verification of wealth and funds – a contributing factor to 32% of fines. This included not knowing how much money a business has at its disposal, without which firms cannot contextualise customer transactions.
- Discrepancies between customer declarations and the public record – a contributing factor to 18% of fines. This included failure to detect mismatches between “what a customer says about themself” and “what the public record shows”.
FCA no longer want ‘on paper’ policies
The findings of the report highlight how the FCA is no longer satisfied with the policies firms have ‘on paper’. In AML compliance and the fight against financial crime, enforcement action now focuses on whether institutions can obtain, verify and continuously update accurate customer information in practice.
Steve Lamb, CEO at Kyckr, commented, “The problem firms face is that they are relying on outdated or incomplete data retrieved from siloed workflows. If poor data quality is a major contributor to AML fines, the solution isn’t more staff or bigger frameworks: it’s direct and ongoing access to authoritative company data.
“These findings show that policy alone isn’t enough and that data quality now plays a significant role in AML effectiveness. Financial institutions must be able to prove that their customer information is both accurate and verified in real time.
“Kyckr helps firms close this data blind spot by connecting directly to authoritative company registries, giving compliance teams instant, audit-ready access to verified information from over 300 global sources.”
Methodology
Kyckr analysed 22 Final Notices imposed between 2020 and 2025 for AML non-compliance at financial institutions. Researchers located issues that stemmed directly from insufficient data and information.
As the analysis shows, most of the reasons for the fines stemmed from actions that took place more than a decade ago, before the Final Notice was issued. The findings, therefore, do not necessarily reflect the practices in place today.
The availability and sophistication of technology have since evolved. Financial institutions will likely now be in a stronger position to address any shortcomings. The findings highlight common pitfalls and act as a guide to help implement best practices to ensure robust AML compliance.
Enterprise Times: What this means for businesses.
This was an interesting report, and it is surprising that some financial institutions have relied on outdated or limited information provided by customers. Furthermore, some financial organisations have not consistently verified this data with independent and reliable sources, such as official registries.
Consequently, these organisations inadvertently increased their exposure to individuals with elevated risks of money laundering and terrorist financing.
The verification of customer information through independent and reliable channels remains essential for regulated entities to confirm business legitimacy and appropriately assess transaction volumes. Nonetheless, these ongoing and widespread shortcomings cannot be attributed solely to difficulties in obtaining accurate information.
Kyckr’s analysis of FCA enforcement actions uncovers widespread data weaknesses as a key driver of regulatory failings and financial penalties.
