Navigating 2025: Key Trends in Sanctions, Transparency, and Public-Private Partnerships for Foreign Banks in the UK

The contents of this blog are for general information purposes only and do not constitute legal advice. Association of Foreign Banks disclaims liability for actions taken based on the materials. Readers should consult their legal advisers.

As 2025 approaches, the challenges facing foreign banks in the UK are becoming sharper and more urgent. From navigating sanctions complexity to tackling financial crime, the pressure to adapt is mounting. At this year’s Association of Foreign Banks Financial Crime Conference, I had the opportunity to connect with peers and hear firsthand about the hurdles and opportunities they’re seeing on the horizon.

Drawing on these discussions, as well as insights from ComplyAdvantage’s upcoming State of Financial Crime report, this article reflects on some of the trends I predict will shape the compliance landscape in 2025 and what they mean for foreign banks operating in the UK.

Prediction 1: Sanctions Divergence Will Reshape Compliance Strategies

Historically, the United States has played a central role in leading sanctions enforcement in coordination with its allies. However, with the Trump administration likely to prioritize tariffs and economic protectionism over traditional sanctions, this established dynamic may be disrupted. Key geopolitical flashpoints, such as the ongoing conflict in Ukraine and unrest in the Middle East, could further widen the gap between US and European sanctions strategies. For the first time in years, Europe may find itself compelled to take the lead in sanctions enforcement. This shift is likely to increase the complexity of cross-border compliance, requiring firms to navigate fragmented enforcement frameworks and varying regulatory priorities across jurisdictions.

The challenges are particularly acute for UK branches of foreign banks. Discrepancies between UK regulators like the Financial Conduct Authority (FCA) and the Office of Financial Sanctions Implementation (OFSI), coupled with potential misalignments with US sanctions policies, will demand a more proactive and flexible approach. Compliance leaders will need to invest in tools and processes that provide real-time insights into evolving sanctions regimes while maintaining robust due diligence practices to mitigate operational risks.

Prediction 2: Beneficial Ownership Transparency Will Become a Key Compliance Priority

The Economic Crime and Corporate Transparency Act, along with expanded powers granted to Companies House, will continue to reshape the landscape of beneficial ownership transparency in the UK as we move into 2025. The Act mandates that UK-registered companies disclose their beneficial owners to Companies House, reducing the potential for false reporting by illegitimate companies and reinforcing the message that beneficial ownership data is a core component of enhanced due diligence (EDD), not just an add-on.

For foreign banks operating in the UK, this shift means they must ensure their corporate clients are compliant with these new requirements while also verifying and assessing the accuracy of the beneficial ownership information provided. Although banks are not directly responsible for submitting this data, they will need to rely on up-to-date, accurate information from their corporate clients. As regulators shift their focus from education to enforcement in 2025, firms can expect stricter implementation, including reprimands and financial penalties. These actions could have significant financial and reputational consequences, especially if they attract media attention.

Prediction 3: Collaboration Will Enhance Financial Crime Prevention

As regulatory expectations grow increasingly complex, financial institutions (FIs) are being urged to explore more effective ways to navigate compliance challenges. One of the most promising solutions for 2025 is the development of stronger public-private partnerships, particularly through enhanced data-sharing protocols. According to our 2025 State of Financial Crime report, 47 percent of compliance professionals believe that collaboration between FIs and government bodies will have the greatest impact on improving anti-money laundering (AML) enforcement, far outweighing the effect of larger fines (only 38 percent said fines would be most effective).

However, this shift toward public-private partnerships is not just about sharing data; it’s about fostering a more cooperative relationship that enhances both enforcement and compliance operations. For foreign banks operating in the UK, these partnerships could provide access to critical intelligence, improve compliance strategies, and strengthen relationships with regulators. As regulatory scrutiny continues to rise, firms that are actively engaged in collaborative efforts will be better positioned to navigate the evolving compliance landscape. Moreover, by embracing such partnerships, these banks may not only reduce their operational burden but also strengthen their reputational standing as proactive and responsible members of the financial ecosystem.

Pre-register now to claim your copy of ComplyAdvantage’s latest annual compliance report, The State of Financial Crime – coming January

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ComplyAdvantage is the financial industry’s leading source of AI-driven financial crime risk data and fraud detection technology. ComplyAdvantage’s mission is to neutralize the risk of money laundering, terrorist financing, corruption, and other financial crime. More than 1000 enterprises in 75 countries rely on ComplyAdvantage to understand the risk of who they’re doing business with through the world’s only global, real-time database of people and companies. The company identifies thousands of risk events daily from millions of structured and unstructured data points. ComplyAdvantage has four global hubs in New York, London, Singapore, and Cluj-Napoca and is backed by Goldman Sachs, Ontario Teachers, Index Ventures, and Balderton Capital.

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