Financial Crime: The Regions; An Overview

Financial Crime: A Rapidly Evolving Threat

Financial crime is growing quickly across the UK – not just in London but in regional markets too. Government data shows enforcement agencies are struggling to keep pace. Technology is driving this change, with artificial intelligence now a major tool for fraudsters.

In the first half of 2025 alone, the UK fraud prevention service, Cifas, recorded over 217,000 identity fraud cases, many involving AI-generated profiles and synthetic identities. Cryptocurrency-related crime adds another layer of complexity. While Bitcoin seizures make headlines, most illicit activity remains hidden due to the decentralised nature of blockchain.

Although fraud now accounts for 41% of all crime, there is still no coherent UK national strategy to tackle tech-driven threats.

Money laundering through property

Money laundering via UK property remains a top enforcement priority. Estimates suggest that up to GBP10 billion annually is laundered through real estate, often via shell companies and opaque trusts. The anti-corruption organisation, Transparency International UK, reports that GBP11 billion in suspicious wealth has entered the UK market since 2016.

Despite measures like the Register of Overseas Entities under the Economic Crime (Transparency and Enforcement) Act 2022, enforcement gaps persist. In response, HMRC is scrutinising estate agents and conveyancers, while the National Crime Agency (NCA) uses Unexplained Wealth Orders (UWOs) to freeze assets linked to corruption and organised crime.

As criminals increasingly exploit AI-generated identities and crypto-linked property transactions, enforcement bodies are investing in advanced analytics and biometric anti-money laundering tools.

Legislation and enforcement gaps

The Fraud Act 2006 remains the backbone of UK fraud law, but it was never designed for today’s cyber-enabled crime. Enforcement agencies rely heavily on the Proceeds of Crime Act 2002 (POCA) for asset recovery – a reactive approach, rather than prevention.

The gap between offences and prosecutions is stark: between June 2024 and June 2025, there were 1.2 million recorded cases of financial fraud, but only 13,000 prosecutions. This widening divide shows how far enforcement has fallen behind.

Corporate liability: a new era

The Economic Crime and Corporate Transparency Act 2023 introduced a new offence: failure to prevent fraud. This marked a major shift in corporate liability, targeting companies that allow fraud through negligence or via agents. This measure was taken in response to challenges faced by the Serious Fraud Office (SFO) in cases like the Unaoil bribery investigation, where proving corporate complicity was difficult. While this law may affect fraudulent selling cases, enforcement will likely focus on asset-rich companies – not consumer-level fraud. Taxpayers will bear the brunt as HMRC prioritises cases under the Criminal Finances Act 2017 and POCA, targeting offences that will help reduce the UK tax gap, which rose to GBP46.8 billion in 2023–24.

Pressure on the justice system

The growing complexity of financial crime is straining enforcement and defence systems. The SFO faces resource challenges, with high-profile cases like Safe Hands Funeral Plans and Patisserie Valerie consuming vast amounts of time and money. Failed prosecutions – including Euribor and G4S – have further dented confidence.

On the defence side, firms under the Very High Cost Case (VHCC) scheme earn as little as GBP25 an hour, inevitably forcing firms to turn down work. This creates bottlenecks and undermines public trust. Without reform of legal aid rates, the imbalance between prosecution and defence will deepen.

Regional legal expertise on the rise

For decades, London firms dominated complex financial crime litigation. That monopoly is finally being eroded as regional practices increasingly handle nationally significant cases, delivering strong results. This shift reflects a broader dispersal of specialist legal services and a willingness on the part of top-tier practitioners to find a home away from the capital.

Conclusion

Financial crime in the UK is evolving faster than the systems designed to combat it. Technology has expanded the scale and complexity of offences – from AI-driven identity fraud to crypto-enabled laundering – while enforcement remains fragmented and reactive. Legislative updates, such as the failure-to-prevent fraud offence, signal progress but focus largely on corporate liability rather than the consumer-level fraud that dominates recorded cases. Meanwhile, resource constraints within the SFO and defence sector, combined with enforcement gaps in property and cross-border transactions, create significant vulnerabilities.

Without a coherent national strategy, stronger co-ordination between regulators, and investment in technology-driven enforcement, the UK risks falling further behind in the fight against financial crime. Tackling this challenge requires a shift from piecemeal measures to a unified approach – one that balances prevention, prosecution and recovery, while addressing both high-value corporate crime and the everyday fraud impacting consumers.