September 25, 2025

 Sarah Wilson-Ward

 Deepali Mendiratta

law departments compliance trends

In today’s hyper-connected financial ecosystem, the ability to move capital across borders in seconds has transformed global commerce – but it has also amplified the risk of illicit activity. Money laundering remains one of the most significant threats to global financial stability and security, directly fuelling terrorism, drug trafficking, tax evasion, and corruption. With estimates suggesting that 2-5% of global GDP is laundered annually, governments and institutions are intensifying their focus on Anti-Money Laundering (AML) frameworks – not just as a compliance requirement, but as a strategic necessity.

The Cost of Non-Compliance

AML regulations are no longer a box-ticking exercise. The consequences of failure are severe and multifaceted for both individuals and organisations alike:

• Financial penalties running into millions
• Revocation of licenses and operational restrictions
• Punitive legal actions against individuals and entities
• Reputational damage that can erode stakeholder trust

AML is now a boardroom-level issue, demanding attention from legal departments, compliance teams, and executive leadership.

Navigating the Global AML Landscape

AML regulations are shaped by a complex interplay of international standards and local legislation. The Financial Action Task Force (FATF) sets the global benchmark, with its recommendations adopted by over 200 jurisdictions. Key frameworks include:

Despite shared goals, implementation and enforcement vary across countries, presenting challenges for multinational organisations.

Recent Shifts

Starting this year, the EU launched a new authority to oversee Anti-Money Laundering and Countering the Financing of Terrorism (CFT), aiming to harmonise enforcement among member states. This marks a significant shift toward centralised oversight with stricter rules on beneficial ownership, Customer Due Diligence (CDD), and cash transaction limits. For financial institutions, this signals a move from fragmented compliance to unified accountability.

In Australia, the AML/CFT Amendment Act 2024 extends the AML obligations to lawyers, accountants, and real estate agents, sectors previously outside the regulatory perimeter. With the compliance deadline approaching (in just a year), affected entities must not only build frameworks but also embed AML into their operational culture.

These developments reflect a broader trend: AML is no longer confined to financial services – it’s becoming a cross-industry mandate.

Pillars of a Strategic AML Program

Organisations subject to AML regulations must proactively reassess their policies and processes. As regulatory expectations intensify, the time and effort required to maintain compliance will also increase, and without proper preparation, so will the associated costs. A clear understanding of where your current framework stands and how it must evolve, will be critical for a smooth transition.

We recommend implementing a holistic AML Framework to ensure compliance across jurisdictions. The key elements include:

1. Risk Assessment, Customer Due Diligence (CDD), and Know Your Customer (KYC)
   Entities must verify the identity of their customers, understand their business relationships, and assess their risk profiles. Enhanced due diligence (EDD) is required for high-risk customers or transactions.
2. Transaction Monitoring
   Entities, especially those vulnerable to financial crime, like banks, insurance, real estate, and telecom, should proactively monitor transactions for suspicious activity. Suspicious Activity Reports (SARs) must be submitted to authorities when red flags are detected.
3. Regulatory Compliance, Reporting, and Record-Keeping
   Adherence to local and international laws must be ensured, and meticulous records must be maintained for regulators.
4. Ongoing Training and Awareness
   Employees must be regularly trained in AML procedures and red flags to ensure vigilance at every level of the organisation.

The Future of AML

The future of AML will be shaped by technologies, global collaboration, and regulatory adaptation. Artificial Intelligence and Machine Learning are transforming transaction monitoring, enabling faster and more accurate detection of suspicious patterns, often through human-in-the-loop models, bringing efficiency while also ensuring a context-led approach.

Institutions are also leveraging data analytics to predict and prevent illicit activity before it occurs. Meanwhile, cross-sector collaboration between financial institutions, regulators, and law enforcement is becoming essential to outpace criminal activity. As cryptocurrencies gain mainstream traction, regulators are tightening AML oversight in the digital asset space, pushing for greater transparency and compliance.

Together, these trends signal a shift from reactive compliance to proactive risk management.

Conclusion

While the threat of money laundering remains profound, ongoing innovation and international cooperation offer hope for a safer, more transparent financial system. For institutions and individuals alike, understanding AML is no longer optional – it is a strategic necessity.

At Elevate, we help legal and compliance teams navigate this complexity with scalable, cost-effective solutions that go beyond check-the-box compliance. Whether you are a compliance professional, a business leader, or simply a curious observer, staying ahead of AML trends and regulations is crucial.