As we step into 2025, the financial industry braces for another year of navigating compliance challenges and regulatory uncertainties. For AML (Anti-Money Laundering) teams, this means staying vigilant, adaptable, proactive, and informed. With a shifting political landscape, evolving FinCEN priorities, and a trend of rising monetary penalties, there's plenty to consider as we gear up for a new year. Here’s what your AML team should be watching in 2025:
New Administration, New Rules?
The inauguration of President-Elect Trump this January has stirred speculation about potential regulatory shifts. Historically, Republican administrations have aimed to reduce regulatory burdens on banks, and early indicators suggest this trend may continue. However, when it comes to AML, the outlook isn’t as clear-cut.
Despite the promise of rolled-back regulations in some areas, AML compliance may remain a priority, driven by bipartisan concern over financial crimes and national security. A week after President-Elect Trump’s nomination, US regulators gathered in New York to discuss plan under the new administration, with Whitney Case, Associate Director of the Enforcement and Compliance Division at FinCEN, stating "In the BSA/AML universe, we have a broad remit so we are going to continue to see a variety of actions against a variety of financial institutions." Case went on to say blocking criminals from using banks for financial crimes "has been a priority area and you are going to see enforcement actions," indicating that we might not see a rollback of money penalties in 2025.
While changes to broader banking regulations may ease operational complexities, don’t expect a free pass when it comes to AML enforcement. It’s critical to stay informed about policy developments and be prepared to adapt swiftly to new requirements—or lack thereof.
Increased Emphasis on FinCEN Priorities
If there’s one certainty in 2025, it’s that FinCEN’s priorities aren’t going anywhere. In 2024, the agency issued a “Proposed Rule to Strengthen and Modernize Financial Institutions’ AML/CFT Programs,” where financial institutions would be required to “review government-wide AML/CFT priorities and incorporate them, as appropriate, into risk-based programs, as well as provide for certain technical changes to program requirements.” FinCEN last updated its priorities in June of 2021, highlighting eight crucial areas for financial crime fighters:
Corruption
Cybercrime, including Relevant Cybersecurity and Virtual Currency Considerations
Terrorist Financing (both domestic and international)
Fraud
Transnational Criminal Organization Activity
Drug Trafficking Organization Activity
Human Trafficking and Human Smuggling
Proliferation Financing
Building these priorities into your existing framework could involve redefining risk assessments, updating internal training, and incorporating new technologies to monitor previously untracked behaviors. Compliance isn’t just about checking boxes—it’s about ensuring that your institution aligns with FinCEN’s broader mission to keep our communities safe from financial crimes. While the rule is still under review, starting early will position your team as leaders in AML compliance and help you avoid scrambling when and if the rule becomes finalized.
Money Penalties Rose in 2024—What About 2025?
Last year was a wake-up call for many financial institutions. 2024 saw a notable increase in enforcement action and monetary penalties, with more than 120 enforcement actions, fines, lawsuits and complaints against banks of all sizes from the Fed, OCC, FDIC, and CFPB. Most notably, these actions included a $3 billion penalty and an asset growth cap for TD Bank as well as a focus on banks with BaaS relationships, causing some major players to vow to exit the space entirely.
While it may be easy for community banks and credit unions to dismiss these enforcement actions as problems just for big banks, 2024 also brought money penalties for institutions under $25M in assets, showing that no one is exempt from regulatory scrutiny. This trend, combined with growing scrutiny from regulators, suggests that 2025 could bring even higher stakes for banks and credit unions.
For AML teams, this is an opportunity to make the case to leadership for greater investment in compliance. Use the data from 2024 to emphasize the financial and reputational costs of falling short to your board and leadership team. Whether it’s adopting advanced technology or adding skilled personnel, proactively addressing gaps in your program can protect your institution from costly penalties down the line.
The Bottom Line
2025 is shaping up to be a pivotal year for AML teams. Between potential regulatory shifts under a new administration, FinCEN’s proposed mandates, and the steady rise of monetary penalties, the landscape is as dynamic as ever. By staying informed and proactive, you can position your institution not only to survive but thrive in the face of evolving compliance challenges.
The road ahead might be uncertain, but with a clear strategy, innovative tools, and strong leadership support, your AML team can handle whatever 2025 throws its way. Let’s make this year one of compliance excellence!
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