The Solicitors Regulation Authority’s loss of its anti-money laundering (AML) supervision powers marks a “wake-up call” for the legal profession, according to SmartSearch chief executive Phil Cotter.
His warning follows confirmation that the Financial Conduct Authority (FCA) will assume responsibility for AML oversight of law firms, in one of the most significant regulatory shifts in the sector in recent years.
Cotter said: “The FCA takeover of AML supervision is a wake-up call for the legal sector: compliance can no longer be treated as a tick-box exercise – it must be embedded, proactive, and risk-based.
“With over 6,000 firms and 23,000 individuals now moving under FCA oversight, the scale and complexity of this transition cannot be underestimated.
“Firms should expect greater scrutiny, higher expectations, and zero tolerance for gaps in compliance.”
He added that the government’s wider campaign against financial crime was intensifying. “It’s clear that the UK government is making the fight against financial crime a national priority. From the Economic Crime and Corporate Transparency Act to the rollout of digital ID cards, legal and financial firms are firmly in the spotlight.
“The pressure to get compliance right has never been greater.”
GREATER SOPHISTICATION
Cotter said the FCA’s emphasis on risk-based regulation would require firms to adopt more sophisticated systems capable of delivering “real compliance, not just surface-level processes”.
“SmartSearch helps clients achieve this by running robust AML checks through a single, automated workflow that simplifies onboarding and ensures full due diligence,” he said.
“Our mission is to help firms know exactly who they’re doing business with, and to make that process clear, secure, and efficient, so that they can grow their own organisations with confidence.
“This isn’t just about meeting regulatory requirements — it’s about helping firms win business through trusted identities.”
SmartSearch, which provides digital compliance solutions to over 3,000 FCA-regulated firms and more than 800 legal practices, partners with data providers including World-Check and Dow Jones, and uses triple-bureau data for identity verification and screening.
“In a changing landscape, partnering with SmartSearch is not just the smart choice — it’s the only choice for businesses serious about compliance and tackling the fight against financial crime,” Cotter said.
