Earlier this year, Transparency International UK (TIUK) found over 170 properties, worth a total of £2.5bn, that had been bought using “suspicious wealth” and owned via complex trust structures. Some 138 of these were purchased in the past 15 years. In 2022, TIUK described the UK as a “hot spot” for international money laundering, with at least £1.5bn worth of property owned by Russians accused of corruption or connected to the Kremlin.

While this may be a blight on the general property market, specialist finance professionals said they also saw the risks.

“Any corner of the financial world can be exposed to money laundering (ML) — but the specialist finance sector feels it more acutely,” said Joshua Field, head of credit at Albatross Lending Group.

“We’re dealing with complex deals that move at speed, often involving layered corporate structures or offshore entities. That combination of complexity and urgency is exactly what bad actors look for.”

Compared with the wider finance world, the specialist finance market was particularly exposed, he noted.

“We’re at greater risk, no question. The high street has armies of compliance officers and layers of bureaucracy designed to keep everything watertight.”

Joshua explained that the fast pace of the specialist finance market — and its focus on cases typically shunned by the mainstream — inherently increased exposure. He said lenders therefore had to be vigilant, resisting the temptation to cut corners for speed and consistently probing sources of wealth (SoW) and funds (SoF).

However, Jason Berry, group sales director at Crystal Specialist Finance, maintained that specialist finance was not inherently riskier, although the fast pace of cases and higher values demanded stronger governance.

“Whether regulated or not, brokers must use discipline — conducting enhanced due diligence on rapid transactions, screening all parties against sanctions lists, and escalating suspicions promptly.

“The future of anti-money laundering (AML) resilience in our sector will hinge on technology-driven verification, data transparency, and a culture where speed never overrides scrutiny.”

Joshua said that, unlike regulated lenders, unregulated firms operated without an FCA ‘safety net’. He noted that this made strong internal standards essential, with a robust underwriting and compliance culture needed to manage risk.

•   The Finance Professional Show 2025: The Video
•   Pro footballer plots his transfer into the bridging market
•   Ultimate Finance sees 'untapped demand', targeting £400m milestone and bridging growth

While Joshua and Jason both highlighted the impact of tech, in recent years regulations have also been introduced to combat ML. After Russia’s invasion of Ukraine in 2022, the Economic Crime (Transparency and Enforcement) Act was accelerated and passed; this included the Register of Overseas Entities to increase transparency over international beneficial ownership.

In addition, the government’s Money Laundering Regulations (MLR) —  which were introduced in 2017  — were amended in 2019, and updated in 2020.

Ray Cohen, owner and director at Jackson Cohen Associates Ltd, suggested that although people often focused on the 2017 MLR, there were multiple interlinked regulations to take into account, including the Proceeds of Crime Act, Sanctions and Money Laundering Act, and Counter Terrorism Act, among others. For Ray, AML comes down to more than simply identifying customers.

“The specialist finance market has two key exposures,” said Ray, “ID fraud due to the speed with which transactions take place, and the use of dirty money. This includes refinancing existing property bought with the proceeds of crime.”
He stated that customers should be assessed based on risk levels to define the level of scrutiny required, and that common sense should also be used with evaluating customers.

“We hear SoF bandied about a lot. Some reference is also made to SoW. They are not the same. SoF is more focused on where the funds are, whereas SoW is how they were accumulated in the first place, along with the wider wealth of the borrower.

“Too often, lenders focus on evidencing the funds as opposed to considering and evidencing the wider SoW.”

According to Ray, lenders could become complacent with repeat borrowers, noting that scrutiny potentially weakened as familiar customers returned and loan sizes grew. He also warned of an over-reliance on solicitors for AML checks, stressing that lenders should run their own background investigations.

However, brokers must also play their part, he emphasised.

“Brokers have ML duties, but many restrict themselves to identifying customers and assume the lender will do everything else. This can mean not asking enough questions at the outset and thus lead them to introduce deals for money launderers.”

Ray maintained that brokers should understand their customers fully, including details such as SoF, SoW, incomes, and age, to ensure their stories make sense — and be rigorous in requesting more information where they do not.

“They should also not be afraid of reporting their suspicions to the NCA and then declining the deal.”

While regulation may keep updating in the fight against money laundering, Joshua suggested that the key aspects of staying ahead were scrutiny, healthy scepticism, and not getting complacent.

“At the end of the day, money laundering isn’t something you solve — it’s something you manage. The goal is to stay one step ahead, every single time.”