Mortgage and financial services firms are being urged to review their sanctions controls after the Financial Conduct Authority revealed significant weaknesses in compliance processes across the sector.

The regulator’s latest review found UK financial firms froze £37bn of assets during 2025, up from £24.4bn the previous year, but warned that important gaps remain in firms’ sanctions frameworks.

Following an assessment of sanctions systems and controls at more than 150 financial services firms, the FCA identified weaknesses in due diligence, alert management, transaction screening, name screening and the management of frozen assets as the most common causes of sanctions breaches.

The findings come as firms face growing regulatory scrutiny amid an increasingly complex global sanctions environment and heightened expectations around financial crime prevention.

ROBUST CONTROLS

David Jones (main picture, inset), director at Click2Check, said that the FCA’s findings should serve as a reminder to brokers and advisers of the importance of robust onboarding and verification processes.

He said: “The FCA’s latest findings highlight that, while progress has been made, there is still work to do across the industry to ensure sanctions controls are consistently robust

“For brokers, this reinforces the importance of carrying out thorough and complete checks at the outset. Many of the issues identified – such as gaps in due diligence, screening and alert management – are areas where stronger, more consistent processes can make a real difference.”

And he added: “In an increasingly complex sanctions landscape, particularly with a widening range of regimes in focus, relying on manual or fragmented processes can create unnecessary risk. Brokers need confidence that the checks they are conducting are comprehensive, up to date and aligned with regulatory expectations.”

AUTOMATED ID CHECK

He said that technology would play an increasingly important role in helping firms meet their regulatory obligations.

“By embedding automated identity verification, sanctions screening and ongoing monitoring into onboarding workflows, firms can strengthen compliance while maintaining efficiency.

“At Click2Check, we work with brokers to streamline these checks, helping them build more consistent, reliable processes and demonstrate that they have effective systems and controls in place.”

The FCA said firms should continue reviewing and strengthening their sanctions controls to ensure they remain effective as risks evolve.