2026 Predictions for the future of AML and KYC compliance

As we enter 2026, the world of financial crime compliance continues to evolve at pace. Regulatory expectations are rising, criminals are growing more sophisticated, and compliance teams are expected to do more - with fewer resources. The next wave of anti-money laundering (AML) and Know Your Customer (KYC) developments will be shaped by global regulation, technology, geopolitical pressures, and rising demand for efficiency and automation.

Here are the key predictions for AML and KYC from the Avallone team in 2026 - and what your business should be thinking about now.

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1. Regulators Will Demand More Continuous KYC

For Anders Meinert Jørgensen - Avallone's CEO, he believes that this year, the days of point-in-time KYC checks are numbered. Regulators around the world are moving toward an expectation of perpetual KYC - where customer data is continuously monitored, assessed, and updated. This shift reflects the realisation that risks can change overnight. In 2026, more jurisdictions will begin requiring firms to demonstrate not just that KYC was done, but that it is being kept up-to-date dynamically.

This change will particularly affect large corporates, funds, and financial institutions dealing with complex ownership structures or high volumes of counterparties. KYC refresh cycles will give way to automated monitoring of risk indicators and trigger-based reviews - driven by external data and smart alerts.

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2. AI and Automation Will No Longer Be Optional

Artificial intelligence has been central to many KYC and AML initiatives in recent years, but in 2026 it will become a core expectation. Compliance teams can no longer afford to rely on manual processes, especially with rising demands for speed and accuracy.

Avallone CTO, Ahmad Nazir Raja, expects increased adoption of AI tools that can triage alerts, extract information from documents, flag discrepancies in beneficial ownership records, and identify patterns in transaction data that would otherwise be missed. Natural Language Processing (NLP) will play a major role in helping teams process adverse media and sanctions list data across multiple languages and jurisdictions.

Firms that invest early in AI-driven onboarding, screening, and monitoring solutions will gain a competitive advantage - not just in compliance but also in customer experience.

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3. AML and ESG Will Continue to Converge

One of the more interesting developments in recent years is the growing overlap between AML compliance and Environmental, Social, and Governance (ESG) frameworks. In 2026, Nino Pavesi - Avallone's CRO - believes that this trend will accelerate, especially in Europe.

Companies and financial institutions will face increased pressure to screen counterparties not only for financial crime risks but also for ESG-related red flags. That includes links to environmental harm, corruption, human rights violations, or operations in sanctioned or high-risk jurisdictions.

We expect to see more regulators and investors asking businesses to show that their KYC processes include ESG screening elements. This will require better data integration, clearer policies, and closer collaboration between compliance and sustainability teams.

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4. UBO Verification Will Face a Global Crackdown

Sune Warberg Clausen - Avallone's VP of Financial Crime Prevention and Customer Success - has noted that the past two years have seen growing frustration among regulators over the difficulty of verifying Ultimate Beneficial Owners (UBOs). Shell companies, nominee structures, and jurisdictional loopholes continue to enable illicit finance.

In 2026, expect tighter rules and stronger enforcement around UBO verification - particularly in the EU, UK, and US. Regulators will demand more evidence behind declarations and will expect firms to challenge incomplete or conflicting ownership information. “Trust but verify” will be the new standard.

Tools that link multiple data sources to provide a more complete and real-time view of ownership will become more common, especially in sectors where UBOs are frequently obscured - such as real estate, investment funds, and cross-border corporate services.

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5. KYC Will Expand Beyond Finance and Regulated Entities

KYC and AML obligations are no longer confined to banks and financial institutions nor to just regulated entities. In 2026, the scope will continue to broaden. Real estate, crypto platforms, law firms, fintechs, and even high-end retailers will face greater regulatory scrutiny and be required to perform robust customer due diligence. Non regulated organizations will them themselves also needing to perform KYC.

This expansion will put pressure on businesses that are unfamiliar with AML compliance frameworks. Many will look to external vendors and managed services to fill in the gaps quickly. The demand for flexible, scalable, and user-friendly KYC platforms will only grow.

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6. Collaboration Will Be a Key Competitive Advantage

In 2026, firms that collaborate across teams, jurisdictions, and sectors will be better positioned to succeed. This means tighter coordination between Compliance, Legal, Treasury, and Risk functions - and increased data-sharing with counterparties, regulators, and technology providers.

Martin Albertsen - Avallone's Chief Product Officer - sees the growth of interoperable platforms being a major driver of this shift. We expect to see wider adoption of shared KYC utilities, secure data exchange frameworks, and permission-based identity management systems that allow verified information to be reused across onboarding cycles and business relationships. API-first infrastructure will enable seamless integration between internal systems and third-party compliance tools, eliminating the need to re-enter or reconcile data across platforms.

Advancements in digital identity verification, blockchain-based registries, and secure document vaults will also play a role in improving cross-border collaboration and reducing onboarding friction. These technologies allow different stakeholders: banks, corporates, fund administrators, and service providers - to work from a single source of truth while maintaining compliance and data protection standards.

As regulatory expectations rise and onboarding deadlines tighten, companies that can operate with shared, real-time access to trusted KYC data will be faster, more efficient, and better protected from risk. Collaboration will no longer be a soft skill; it will be a technical advantage.

In 2026, firms that collaborate across teams, jurisdictions, and sectors will be better positioned to succeed. That includes closer coordination between Compliance, Legal, Treasury, and Risk functions - and also greater information sharing with counterparties, regulators, and technology partners.

We expect to see further growth in utilities and consortium-based KYC models, especially in the corporate and fund spaces. Shared platforms and secure data reuse mechanisms will help reduce duplication, speed up onboarding, and improve data quality across the ecosystem.

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7. Managed Services Will See Continued Growth

As KYC processes become more complex and continuous, many firms will turn to managed services providers for support. Avallone's Financial Crime Prevention Services + Support Team Lead - Eglė Griškienė - has seen this in 2025, and she thinks that in 2026, outsourcing portions of KYC workflows - such as data collection, verification, screening, and remediation - will be a strategic move, not just a stopgap.

Companies under pressure from internal resource constraints or external onboarding deadlines will increasingly seek expert partners who can deliver both technology and human expertise. Managed services will play a key role in bridging compliance gaps and scaling operations during peaks in demand, M&A activity, or regulatory change.

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Looking Ahead

It looks as if 2026 will be a defining year for KYC and AML. The regulatory bar is rising, and expectations around transparency, accountability, and technology maturity are becoming more demanding. Compliance teams must think long-term: Are processes agile enough? Is your technology stack future-proof? Are you and your team equipped to handle continuous KYC?

At Avallone, we believe the future of financial crime prevention lies in intelligent automation, collaborative frameworks, and flexible support models that scale with your business. Whether you’re collecting KYC from your clients, responding to questionnaires from banks, or managing legal entity data across jurisdictions, now is the time to get ahead of the changes.