AML rules push continuous monitoring
U.S. regulators signalled a move from periodic checks to always-on AML programmes, with FinCEN’s April 7 proposal centring anti‑money‑laundering on ongoing monitoring rather than static checklists. The shift comes alongside similar international pressure — Australia’s AUSTRAC set 2026 deadlines for AML/CTF reform — which together force banks and fintechs to redesign controls, evidence pipelines and program effectiveness metrics. (pymnts.com, fintech.global, troutman.com)
A bank used to be able to treat anti-money laundering like a fire drill: run the test, fill out the binder, wait for the examiner. On April 7, 2026, the Financial Crimes Enforcement Network proposed rewriting that routine so firms have to show their controls work all the time, not just on inspection day. (troutman.com) The Financial Crimes Enforcement Network is the Treasury bureau that enforces the Bank Secrecy Act, the main U.S. anti-money-laundering law for banks and many nonbanks. The American Bankers Association said the April 7 proposal would “fundamentally reform” what those programs must contain. (bankingjournal.aba.com) The shift is from technical compliance to effectiveness. Troutman Pepper Locke’s summary of the proposal says the rule would center programs on a risk assessment, internal controls tied to that risk, and ongoing monitoring that can actually detect suspicious activity as customers and transactions change. (troutman.com) That sounds abstract until you picture how money moves now. A fintech can onboard a customer in minutes, push payments across several apps in one day, and change products or geographies in one quarter, so a once-a-year policy review misses the action. (pymnts.com) The proposal also reaches beyond banks. The Office of the Comptroller of the Currency said the amended requirements would apply to all national banks and federal savings associations, including community banks, while FinCEN’s proposal covers a broad range of financial institutions under the Bank Secrecy Act. (comptrollerofthecurrency.gov, troutman.com) One practical consequence is that “know your customer” stops being a front-door check and becomes a moving file. If a customer’s ownership, transaction pattern, device use, or cross-border activity changes, the anti-money-laundering program has to catch that change fast enough to update the risk view, not months later. (pymnts.com, troutman.com) That is why compliance teams keep talking about “evidence pipelines.” If an examiner asks why a payment was flagged, a firm now needs records showing which data fed the alert, which rule or model fired, who reviewed it, and what happened next. (pymnts.com) The proposal is not final yet. Regulatory Report said the agencies opened a 60-day public comment period on April 7, 2026, and AML Intelligence reported that FinCEN is replacing an earlier July 3, 2024 proposal rather than just tweaking it. (regreport.info, amlintelligence.com) Australia is moving in the same direction on a different calendar. The Department of Home Affairs says the Anti-Money Laundering and Counter-Terrorism Financing Transitional Rules 2026 took effect on March 31, 2026, with existing reporting entities getting until May 30, 2026 to notify their compliance officer and newly regulated “tranche two” businesses getting until July 29, 2026. (homeaffairs.gov.au) Australia’s reform also widens the net. MinterEllison says the revised regime starts on March 31, 2026 for businesses already covered and on July 1, 2026 for newly regulated entities, pulling in sectors like lawyers, accountants, and real-estate professionals that were previously outside much of the system. (minterellison.com, aicsolutions.com.au) So the new burden is not just “do more compliance.” It is “build a system that can prove, with current data, that your anti-money-laundering program matches the risks you actually have this week,” which is a much harder job for banks running old batch systems and fintechs that grew faster than their controls. (pymnts.com, troutman.com)
