Published on 21 April 2026
Jurisdiction: United Kingdom
Tags: FCA, financial crime, customer due diligence, thematic reviews, PEPs, anti-money laundering
On the 8th April 2026, the FCA published its findings following its 2025 multi-firm review of Customer Due Diligence (CDD), Enhanced Due Diligence (EDD) and ongoing due diligence controls. The key takeaways are summarised below and centre around:
Policies and procedures
CDD & EDD processes
Compliance monitoring and audit
Policies lacked practical guidance for staff (e.g., what to do when standard ID is unavailable).
No clear distinction between CDD and EDD, or insufficient detail on what EDD actually requires.
Undefined periodic review cycles and unclear expectations for event‑driven reviews.
Poor version control, making it impossible to evidence updates or governance.
Firms not following their own policies, especially around periodic reviews.
Clear, risk-based differentiation between CDD vs EDD.
Detailed frameworks for identifying PEPs, including incorporating the changes introduced on 10 January 2024 regarding domestic PEPs.
Governance tools (approval matrices, sign-off requirements) that are documented and maintained.
Failure to record key information, such as the purpose and intended nature of the business relationship.
No evidence of EDD measures taken for high-risk customers.
Lack of clarity on when senior management approval is required.
Limited differentiation between low- and high-risk customers in practice.
Missed or inconsistent periodic reviews.
CDD tailored to customer risk profiles.
Fully documented EDD steps, including senior management oversight.
Clear audit trails showing what was done, why, and by whom.
Insufficient detail on how quality control is performed.
Lack of independent second-line or third-line review (e.g., onboarding staff also doing assurance).
No version control or audit trail of changes to CDD documentation.
Regular, structured compliance monitoring cycles.
Independent internal audit or external thematic reviews of CDD.
Documented findings with clear remediation actions.
Review your CDD/EDD frameworks now against these findings.
Strengthen governance, documentation, and oversight.
Ensure controls are risk-based, consistently applied, and evidenced.
Expect continued FCA supervisory focus on financial crime controls.
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