SmartSearch unveils the top compliance trends for 2025

Collette Smith, Chief Transformation Officer, SmartSearch explores the top compliance trends companies are expected to see in 2025.

In the compliance world, 2024 was defined by technological advancements, heightened regulatory scrutiny and the ongoing balancing act between transparency and privacy.

The name of the game this year is preparation, ahead of significant challenges and regulatory advancements.

Firms operating in regulated industries need to prepare for four key compliance trends that are set to shape the future of anti-money laundering (AML), fraud prevention and data privacy.

AI: A double-edged sword

Talk to anyone about the current top trends in their industry and artificial intelligence (AI) will no doubt be on their list.

This is no different for compliance.

On one hand, AI is being harnessed to streamline customer verification, accelerate due diligence and strengthen anti-fraud measures.

On the other hand, it is being used by fraudsters to conduct financial crime in an increasingly sophisticated and convincing way.

One of the most notable risks of AI comes from deepfake technology, which is becoming progressively more difficult to detect.

Last year, an employee of a multinational company was duped into thinking he was in a virtual meeting with his CFO and colleagues.

Unbeknownst to him, the participants were in fact AI-generated deepfake recreations. This sophisticated scam resulted in the fraudulent transfer of $25 million to criminal-controlled bank accounts.

It is important to note however that deepfakes aren’t only impacting corporations. In the UK, fraudsters have used deepfake videos of well-known figures like Martin Lewis and Elon Musk to promote fraudulent schemes to consumers.

As the sophistication of this technology increases, compliance teams will need to deploy equally advanced tools to stay ahead of cybercriminals.

Fortunately, AI-driven compliance technology can help prevent fraud in ways that traditional systems cannot.

For example, while a deepfake may fool human perception, AI-enabled identity verification can flag discrepancies by cross-referencing data across multiple trusted sources, like electoral rolls or credit systems.

Growing adoption of this type of cross-checking will make it far more difficult for fraudsters to insert fake identities into the system.

Privacy vs transparency: Striking the right balance

Finding the right balance between privacy and transparency will be critical for compliance teams this year.

AML regulations require firms to collect and analyse personal and financial data to identify potential fraud risks.

However, privacy laws, particularly the General Data Protection Regulation (GDPR), restrict the collection and processing of personal data unless explicit consent is obtained.

This tension came to a head recently when an earlier draft of the European Union’s Anti-Money Laundering Directive (AMLD), which requires the establishment of a central register of ultimate beneficial owners, was found to violate EU privacy rights.

This landmark decision prompted debates on how firms can balance AML requirements with data protection obligations.

In the UK, the Data Protection Act allows for data sharing for anti-money laundering purposes, but firms often tread carefully to avoid penalties for data misuse.

To manage this complexity in the next 12 months and beyond, regulators, firms, and users will need to work together to develop a more unified approach.

Solutions such as third-party verification, secure data hosting, and clear privacy policies will be essential for organisations to navigate this complex landscape.

Corporate fraud: Tougher liability laws ahead

The introduction of the “failure to prevent fraud” offence in the UK this year will prove to be one of the most significant regulatory changes in recent memory.

The offence falls under the Economic Crime and Corporate Transparency Act (ECCTA), and will come into force on 1 September 2025.

This new regulation extends corporate liability for fraud committed by “employees, agents and other associated persons” if the fraud benefits the organisation and has a UK connection.

The key difference with this legislation from the previous iteration is that liability arises if a company does not have reasonable measures in place to prevent fraud.

This means firms will need to strengthen their internal controls, enhance employee training and conduct more robust due diligence on third-party relationships.

This shift is expected to have a profound impact on organisational culture. Companies that fail to meet their compliance obligations could face criminal prosecution, substantial fines and severe reputational damage.

The regulation will push firms to be more proactive, making continuous compliance monitoring a non-negotiable part of everyday operations.

While the regulation will come into force from September this year, companies can already begin voluntarily complying as of March 2025.

To help businesses understand and prepare for the upcoming regulation change, SmartSearch published a whitepaper specifically on the ECCTA.

Tech-driven compliance: A smarter approach

As compliance demands continue to increase, many firms are turning to technology to bridge the gap.

Third-party compliance platforms that leverage AI, behavioural analytics, biometric verification and secure data hosting are becoming essential for regulated firms.

These platforms can process large datasets in real time, enhancing the speed and accuracy of identity checks and reducing the risk of human error.

AI-powered compliance tools can also detect anomalies that might be missed by traditional methods. For example, biometric verification can detect fraudulent attempts to use synthetic identities, while AI can spot patterns of suspicious behaviour in transaction data.

By incorporating these technologies, firms can create a smarter, more agile and effective compliance framework.

Compliance should not be viewed as a burden, but rather as an opportunity: an opportunity to future-proof operations and safe-guard businesses.

Proactively addressing issues related to AI, privacy and corporate liability will enable businesses to stay ahead of evolving regulatory requirements.

Those that fail to act may find themselves exposed to heightened risks and regulatory penalties.

As digital compliance rightfully continues to evolve to meet the increasingly sophisticated threats of today (and tomorrow), the landscape will naturally become more complex.

However, taking a proactive approach, leveraging the right tools and processes, can turn these challenges into strategic advantages.