Key Topics:
The Financial Action Task Force (FATF) issued new guidance requiring firms to apply a risk-based approach to anti-money laundering (AML), counter-terrorist financing (CFT), and counter-proliferation financing (CPF) in June 2025.
The update aims to tackle financial exclusion by making banking more accessible for all, in particular disadvantaged and vulnerable communities.
“Bringing more people into the formal financial sector is crucial to our fight against financial crime, as it reduces the size of the black and informal markets where criminals and terrorists hide their operations”, said FATF President Elisa de Anda Madrazo.
The new guidance reframes financial inclusion as a key part of AML efforts firms will be expected to demonstrate they’re not excluding people, especially those in low-income, undocumented groups.
With regulatory technology solutions like FinregE, businesses can stay compliant and expand financial services to underserved groups efficiently and responsibly.
What key changes were introduced?
- Updated interpretations of Recommendations 1, 10, 15: The regulator encourages the use of simpler checks, known as simplified due diligence (SDD), for customers who present low risk. This helps more people to safely access financial services.
- A push for fairer access to financial services for everyone: A major goal is to stop “de-risking”, when banks avoid serving groups like migrants or low-income individuals out of fear of regulatory risk.
- The role of digital identity systems and digital financial services: These tools will help people to easily prove their identity and access money services.
- Integration of financial inclusion goals: Countries are urged to align financial inclusion strategies with AML/CFT frameworks and to recognise exclusion as a risk factor.
- Global use cases and best practices: The guidance includes case studies from around the world. These show how different countries use the risk-based approach to improve inclusion and maintain security.
Who is affected?
The updated guidance impacts a broad range of financial services firms:
- Financial institutions (FIs): Banks, payment providers, and microfinance institutions.
- Virtual asset service providers (VASPs) and designated non-financial businesses and professions (DNFBPs).
- Regulators and supervisory authorities tasked with implementing national AML/CFT policies.
- Public sector stakeholders involved in social payments, identification systems, and financial literacy.
What actions firms need to take?
- Review and update AML/CFT frameworks to reflect RBA principles that balance financial integrity with inclusion.
- Implement simplified due diligence (SDD) in low-risk contexts and develop policies that support onboarding underserved populations.
- Assess financial exclusion risks as part of national and institutional risk assessments.
- Engage with supervisory authorities to clarify expectations and support proportionate compliance actions.
Key dates to watch
- June 2025: Official publication of updated FATF Guidance.
- From 2025 onward: National implementation of amended FATF Recommendations and application in mutual evaluations.
Implementing FATF’s 2025 guidelines worldwide
Numerous jurisdictions worldwide are taking steps to align their national frameworks with the FATF’s international standards.
These efforts underscore a global commitment to balancing financial integrity with inclusive access to financial services.
European Union (EU)
The EU has been proactive in integrating the FATF’s recommendations into its regulatory landscape. The establishment of the Anti-Money Laundering Authority (AMLA) aims to centralise AML enforcement and enhance coordination among national financial intelligence units.
Asia-Pacific region
Countries in the Asia-Pacific are also responding to the FATF’s guidance:
- Australia: Through the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia continues to refine its AML/CFT framework, emphasising risk-based approaches and the use of digital identity verification to enhance financial inclusion.
- Singapore: The Monetary Authority of Singapore (MAS) has issued notices to financial institutions to strengthen customer due diligence measures, particularly concerning politically exposed persons (PEPs), aligning with FATF’s emphasis on proportionate risk assessment.
Africa
In Africa, several nations are making significant strides:
- Senegal: Recognised for substantial progress, Senegal was removed from the FATF’s “grey list” in October 2024, reflecting improvements in its AML/CFT measures.
- Algeria, Angola, Ivory Coast, and Lebanon: These countries were added to the “grey list,” indicating ongoing efforts to address strategic deficiencies in their AML/CFT regimes.
Americas
In the Americas, nations are actively working to enhance their AML/CFT frameworks:
- Argentina: The FATF/GAFILAT mutual evaluation report assessed Argentina’s measures to combat money laundering and terrorist financing, highlighting areas for improvement and ongoing efforts to align with FATF standards.
- United States: The Financial Crimes Enforcement Network (FinCEN) continues to inform US businesses about updates to the FATF’s lists of jurisdictions with strategic AML/CFT deficiencies, ensuring compliance with international standards.
Middle East
In the Middle East, countries are taking measures to strengthen their AML/CFT frameworks:
- United Arab Emirates (UAE): After being placed on the FATF’s “grey list” in March 2022, the UAE has been working to address identified AML/CFT deficiencies.
As jurisdictions continue to refine their frameworks, collaboration and adherence to international standards remain pivotal in combating financial crimes and promoting financial inclusion worldwide
How FinregE Supports compliance and inclusion
FinregE provides a powerful platform that aligns with FATF’s 2025 guidance:
- Regulatory horizon scanning: Real-time updates on global AML/CFT standards, including changes to FATF recommendations and national implementations.
- Impact assessment workflows: Tailored tools to determine applicability of new regulations and enable efficient action tracking.
- Machine-readable rule libraries: Support simplified CDD by mapping regulations to firm-specific policies and controls.
- AI-powered risk analysis: The Regulatory Insights Generator (RIG) helps classify financial inclusion risks and determine proportionate responses.
- Digital identity and rule mapping support: Enables clients to adopt digital ID systems in line with FATF guidance.
By leveraging modern regtech solutions like FinregE, organisations can lead the charge in not only safeguarding financial systems but also empowering underserved populations worldwide.
