2024 AML Regulations in Review and Roadmap for 2025

Key Takeaways:

As we transition from 2024 to 2025, financial institutions face a rapidly evolving regulatory landscape. With stringent oversight and transformative policies on the horizon, staying ahead of these changes is crucial for operational resilience and compliance.

Let’s look at some of the changes that marked 2024 and how they will continue to affect regulatory trends in 2025.

2024: A Pivotal Year for Regulatory Evolution

A continued increase in technology adoption drove the creation of innovative digital products, the need for operational resilience and cybersecurity, and the harmonization of rules in 2024 regulations, including the EU Instant Payments Regulation (IPR).

Key regulations in 2024:

• EU AI Act Compliance¹: Regulators are encouraging the increased use of AI in regulatory technology and in June 2024, the EU AI Act was passed, applying to all financial institutions using AI technologies, as well as third-party vendors. Starting this year, the European Supervisory Authorities (i.e., EBA, EIOPA and ESMA) will supervise the governance and risk management rules related to AI compliance.

• Digital Assets and Markets in Crypto-Assets Regulation (MiCAR)²: Regulators are looking at digital and crypto-based assets as a new asset class. The EU regulation on crypto assets (MiCAR) came into force in 2023, and the regulation related to Distributed Ledger Technology (DLT)-based assets, such as real-world asset-based tokens and stablecoins, came into force in June 2024. By the end of the year, the remaining EU rules for digital and crypto assets were also in effect.

• Basel III Endgame: The revised guidelines published in September 2024 increased capital requirements by an average of 9% for global systemically important banks (G-SIBs) with assets of over $100 billion, and by 3-4% for non-GSIBs, in order to safeguard financial resilience globally.

• Digital Operational Resilience Act (DORA)³: Hand-in-hand with tech adoption and data transparency comes data protection and cyber security. Going into effect in January 2025, DORA aims to safeguard against cyber threats and increase operational resilience in financial institutions. It introduces clear guidelines for risk management, incident reporting, resilience testing, and oversight of ICT third-party risks.

• Sustainable Finance Disclosure Regulation (SFDR)⁴: Aimed at fighting greenwashing and improving transparency in sustainable investments, SFDR implementation began in 2024. In May, the European Supervisory Authorities urged national regulators to act against offenders, with France’s AMF (Autorité des Marchés Financiers – the securities commission in France) imposing its first fine.

• European Single Access Point (ESAP)⁵: ESAP, which went into force in January 2024, aims to centralize all financial and sustainability-related information on to one platform. The final implementation guidelines were published by the three European Supervisory Authorities in October 2024 and are set to be available to the public by July 2027.

What the EU AML Package Means for 2025

The EU AML Package, set to launch in 2025, is at the center of upcoming regulatory trends. This comprehensive overhaul of AML/CFT regulations will impact all compliance areas, including enhanced due diligence (EDD), beneficial ownership transparency, and cross-border cooperation.

The AML package aims to stem the rise of financial crime across the globe. In 2023, an investigation by the European Anti-Fraud Office (OLAF) found that over €1.2 billion had been affected by fraud and irregularities⁶. Europe is faced with investment fraud, phishing, online financial fraud and mobile app fraud schemes – all enabled by advanced technologies.

INTERPOL Secretary General Jürgen Stock said:

“We are facing an epidemic in the growth of financial fraud… With the development of AI and Cryptocurrencies, the situation is only going to get worse without urgent action.”⁷

Key Highlights of the AML Package⁸:

• A New Regulatory Body: The Anti-Money Laundering Authority (AMLA), based in Frankfurt, will supervise high-risk financial institutions operating across borders to ensure AML regulations are administered uniformly across the EU and will impose sanctions on entities that don’t comply with the regulations.

• A Single AML Rulebook: The EU AML package will include a single AML rulebook to unify AML rules for all concerned institutions and avoid discrepancies in the application of the regulations across member states.  

• Harmonized and Stringent Due Diligence: All high-risk transactions will now require enhanced due diligence (EDD), while low-risk cases will follow simpler guidelines that can be applied across different jurisdictions. Due Diligence will also become more rigorous and will include verifying beneficial ownership using reliable sources, conducting in-depth risk assessments of the purpose and nature of the business, and ongoing monitoring. Germany’s BaFin, for example, recently released the updated AuA 2.0, which makes adverse media screening mandatory, along with sanctions screening and country risk profiles, effective July 2025.

• Transparent Beneficial Ownership: The AML package will aim to synchronize beneficial ownership verification and transparent disclosure across all member states to reduce the possibility of criminals hiding behind complex corporate structures.

• Expanded Scope: The new AML package will regulate crypto asset service providers, crowdfunding platforms, mortgage lenders, and consumer credit intermediaries to mitigate the growing money laundering risks in non-traditional finance.

• Limited Cash Transactions: The new regulation will cap cash transactions at €10,000 for all member states, even for high-value goods like art or real estate. However, member states can lower the cap below €10,000 at their discretion. Germany, for instance, will require identification and proof of source for transactions exceeding this sum.

• Centralized Bank Account Registers: The EU’s AML framework introduces centralized bank account registers in each member state to consolidate information about account holders and account locations. Accessible to National Financial Intelligence Units (FIUs) and other authorities across the EU, these registers aim to enhance transparency, facilitate the detection of suspicious financial activities, and foster cross-border collaboration and information sharing among member states.

Top Regulatory Trends for 2025 : What to Expect

Most regulatory trends in 2025 will stem from the EU AML Package, guiding financial institutions with the AMLA’s phased implementation.

Key developments include:

• Non-Financial Institutions in Focus: 2025 will see stricter AML regulations for real estate, luxury goods, art, and gaming. Crypto, De-Fi, and digital assets will also be governed by new regulations, most notably the Travel Rule, which will apply to cross-border crypto transactions.

• AI in RegTech: 2025 will firmly usher in the use of AI in regulatory compliance, without which processes like continuous transaction monitoring would be impossible. Regulatory bodies are also pushing for advanced technology like AI and machine learning to detect suspicious activities, automate tasks, and conduct risk assessments.

• Enhanced Beneficial Ownership Verification: Accurately establishing beneficial ownership using trusted third-party data and regularly updating records will likely become the norm, supported by central registries.

• Regulatory Collaboration: Standardized AML regulations, central registries, and cross-border collaboration are all on the horizon, in line with the EU AML package. International cooperation will also play a crucial role in combating financial crimes more effectively

• Dynamic Sanctions List: Real-time, risk-based sanctions screening will become standard in order to keep up with frequent updates of sanctions lists in response to geopolitical events. Financial institutions will need to adopt a risk-based approach to remain efficient while complying with stringent regulations such as the EU Instant Payments Regulation.  

• eKYC and Digital IDs: Digital identity verification will be critical for efficient onboarding. As a result, there will be more guidelines aligned with eKYC standards, emphasizing data security and anti-fraud measures.

• Unified Approach to Fraud and AML: The overarching theme of the EU AML Package is standardization and a unified approach. This focus will extend to integrating anti-fraud and AML functions, fostering a holistic approach to combating financial crimes.

Essential RegTech Tools for 2025 Compliance 

There has been a clear nudge from regulatory bodies to adopt AI-based RegTech solutions to make compliance efficient and ensure adaptability to ensuing regulations in 2025. Here are the most crucial tools financial institutions will require to comply with the upcoming regulatory changes:

• AI-Based AML Transaction Monitoring: Real-time and continuous transaction monitoring will require advanced technology like AI, machine learning, and predictive analytics to detect the slightest discrepancies, stop a transaction in time, and reduce false positive alerts, allowing compliance professionals to focus on high-priority cases.

• Automating Compliance Tasks: Automation of tasks such as onboarding, sanctions screening, adverse media checks, intelligent name screening, alert queue management, report generation, and audit logs will be necessary to improve both the efficiency and the effectiveness of compliance processes.

• Unified Compliance Platforms: As fraud and AML tasks are becoming increasingly integrated, businesses will need centralized systems integrating all compliance functions for quick decision-making.

• Risk-Based Approach: Financial institutions will need to develop a rigorous risk-based approach to compliance, using dynamic risk scoring to detect fraud and money laundering in real time and protect their businesses.

• Automated Adverse Media Screening: With the rise of instant transactions, businesses will need to conduct adverse media screening not only during onboarding and KYC processes, but throughout the customer lifecycle. To achieve this, they need dynamic, GenAI-powered automation capable of flagging adverse media in real time.

• Advanced Data Analytics and Visualization: Compliance officers not only need advanced data analytics, pattern recognition and predictive analytics ; they also need intelligent visualization tools, such as link analysis to perform advanced economic network analysis, uncover beneficial ownership structures, and be able to react to cases quickly.

• Improved Awareness and Training: Fostering a culture of compliance is a top priority for regulatory bodies. For businesses, this means equipping employees with the knowledge to understand evolving regulations and financial crime tactics, and the skills to effectively use AI-based RegTech solutions. This dual focus enhances both productivity and compliance outcomes.

Preparing for 2025 with Siron^®One

To successfully navigate the regulatory challenges of 2025, financial institutions need a solution that unifies compliance processes, harnesses AI for real-time monitoring, and simplifies adherence to complex and evolving regulations.

Leveraging advanced data analytics and AI-powered decision-making, the Siron^®One platform delivers on all these fronts, ensuring your organization stays ahead of 2025’s regulations.

Contact us to learn more or to get a demo of our solutions.

Sources:

1. https://finance.ec.europa.eu/regulation-and-supervision/consultations-0/targeted-consultation-artificial-intelligence-financial-sector_en
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2. https://finance.ec.europa.eu/digital-finance/crypto-assets_en
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3. https://www.digital-operational-resilience-act.com/
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4. https://finance.ec.europa.eu/sustainable-finance/disclosures/sustainability-related-disclosure-financial-services-sector_en
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5. https://www.european-financial-data-space.com/European_Single_Access_Point_(ESAP).html
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6. https://anti-fraud.ec.europa.eu/media-corner/news/olaf-investigations-find-over-eu12-billion-affected-fraud-and-irregularities-2024-06-18_en
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7. https://www.interpol.int/en/News-and-Events/News/2024/INTERPOL-Financial-Fraud-assessment-A-global-threat-boosted-by-technology   
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8. https://finance.ec.europa.eu/financial-crime/anti-money-laundering-and-countering-financing-terrorism-overview_en