Switzerland’s financial sector is undergoing a sweeping transformation in its fight against financial crime, prompted by new regulations set to take effect in 2025.
According to Moody’s, this regulatory overhaul requires financial institutions to modernise their data systems and enhance their control frameworks to align with the updated Anti-Money Laundering Act (AMLA) and the new Federal Act on transparency and tax information exchange.
The changes come in response to the Financial Action Task Force’s Mutual Evaluation Report on Switzerland, which identified key areas requiring improvement. These include stricter due diligence measures (notably Recommendations 22, 23, and 35), better oversight of professional enablers, and the application of more effective and proportionate sanctions for AML and counter-financing of terrorism (CFT) breaches. Compliance on paper is no longer enough—regulators now demand demonstrable effectiveness in practice.
Enforcement activity has already resulted in over CHF 100m in fines for Swiss financial institutions this year. A key development is the launch of a central Ultimate Beneficial Ownership (UBO) register under Article 697j of the Swiss Code of Obligations and Article 2a AMLA. This register, covering more than 600,000 legal entities, increases corporate transparency and supports international cooperation on financial crime investigations.
Major banks have come under scrutiny for inadequate screening procedures, poor verification of entities and beneficial owners, and ineffective due diligence triggers. Delays in reporting suspicious activity to the Money Laundering Reporting Office Switzerland (MROS) have also raised concerns. As Switzerland works more closely with European intelligence networks such as FIU.net, data sharing is expected to play a more prominent role in combating cross-border threats.
Regulatory expectations are now higher for the effective implementation and governance of AML/CFT controls. Under Article 29 AMLA and FINMA Circular 2017/1, compliance officers and senior executives may be held personally liable for control failures, with the possibility of enforcement action or criminal proceedings if governance standards are not met.
Swiss banks also face increasing risk exposure from emerging threats, including digital assets, extraterritorial sanctions, and complex financial crime techniques. Simultaneously, clients expect greater transparency, responsible AI use, and robust protection of personal and financial data. Meeting these expectations requires institutions to prioritise privacy, security, and agility in their compliance operations.
In response, regulatory authorities have implemented targeted measures such as the requirement for crypto service providers to verify wallet ownership, track high-value transactions above CHF 10,000, and comply with the “travel rule” for transfer transparency. In turn, financial institutions are adopting guidance such as FINMA 08/2024 on AI governance and aligning with Circulars 2018/3 and 2023/1 to ensure strong risk and cloud security protocols.
A significant shift is underway in how banks manage compliance data and monitoring. Legacy systems are being replaced with integrated platforms capable of real-time risk detection, intelligent analytics, and efficient internal collaboration. AI is becoming instrumental in monitoring politically exposed persons (PEPs), detecting sanctions breaches, and reducing false positives in alert systems.
Improving due diligence processes is another priority. Automated entity verification and UBO identification can streamline efforts to meet new transparency requirements. Institutions are also being encouraged to move towards perpetual KYC (pKYC) models, implement event-driven risk triggers, and maintain audit-ready documentation.
To support this transition, global firms like Moody’s are stepping in with specialised solutions. The partnership between Moody’s and Elliptic provides Swiss institutions with a powerful combination of blockchain intelligence and traditional data analytics. These tools help firms build modern, risk-based compliance programmes, meet evolving regulatory demands, and mitigate enforcement risks in a rapidly shifting financial crime landscape.
Copyright © 2025 FinTech Global
The post Switzerland’s AML reform drives compliance overhaul appeared first on FinTech Global.