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The financial services landscape is undergoing one of its most significant shifts in over a decade. Regulatory expectations are rising, customers expect seamless digital onboarding, and AI is rapidly transforming both fraud patterns and the capabilities of compliance teams. Institutions across banking, fintech, payments and crypto are being pushed to simultaneously elevate compliance, reduce friction and modernise aging systems - all while responding to reforms and rapidly evolving financial crime risks.
Industry data reinforces the urgency. AUSTRAC’s 2025 compliance update shows regulatory penalties and remediation costs rising year-on-year, while the ACCC reports over $2.7 billion lost to scams in the past year alone. Financial institutions are dealing with heightened regulatory scrutiny, more sophisticated criminal networks and escalating customer expectations. This combination is driving a decisive shift toward unified RegTech solutions, stronger AML frameworks and more automated risk workflows.
In this environment, FrankieOne’s November 2025 customer survey offers a clear snapshot of how organisations are prioritising onboarding, fraud prevention, AML compliance and risk management for the year ahead.
Compliance and Digital Onboarding Top the 2026 Priorities
Respondents identified three dominant priorities for 2026:
- Strengthening AML and compliance frameworks
- Reducing fraud exposure, particularly identity-based fraud
- Improving digital onboarding and customer experience
These priorities reflect a core tension across the sector: institutions must uplift KYC/AML controls without introducing friction that undermines growth. Teams are increasingly focused on building adaptable, scalable processes that deliver both robust compliance and seamless onboarding.
AI is seen as a key enabler. Respondents cited growing interest in AI-driven risk decisioning, compliance automation and predictive analytics to help reduce manual workload and stay ahead of risk. Despite these emerging capabilities, only around one in three respondents feel “very confident” that their current systems can fully meet 2026 compliance and fraud demands - signalling clear opportunities for uplift.
AML/CTF Reforms: Preparing for a New Era of Compliance
AML/CTF reforms emerged as the most significant regulatory priority for 2026. Regulators across Australia, New Zealand, Europe and the UK are pushing for stronger governance, enhanced reporting accuracy and more transparent accountability frameworks - marking a shift toward more proactive, intelligence-led financial crime oversight.
Three major trends are shaping AML readiness:
1. AML compliance is becoming data-led
Regulators expect institutions to demonstrate real-time visibility into customer risk, transaction behaviour and monitoring controls. Traditional document-heavy frameworks are no longer enough.
2. Accountability is moving up the organisation
Boards and senior leaders must now demonstrate clearer oversight, stronger audit trails and defensible decision-making.
3. Fragmented systems are becoming a compliance liability
Siloed data sources and legacy tooling make uplift expensive and slow - and increase the risk of regulatory breaches.
For fintechs scaling into new markets, this means maturing frameworks originally built for speed. For large institutions, it means untangling years of layered processes. In 2026, AML frameworks won’t just be reviewed - they will be stress-tested for resilience and effectiveness.
AI-Driven Fraud: How Emerging Threats Outpace Legacy Controls
AI-driven fraud was one of the strongest themes across survey responses. Generative AI has lowered the cost and complexity of producing synthetic identities, manipulated documents and deepfakes - fundamentally changing the economics of fraud.
Key trends reshaping the threat landscape include:
Deepfake identity manipulation
Fraudsters can now generate hyper-realistic biometric spoofs capable of bypassing basic liveness checks. This elevates the need for multi-layered identity verification and advanced AI-driven detection.
Synthetic identity fraud at scale
Blending real and fabricated data has become easier, allowing criminals to create credible identities that pass traditional KYC checks.
AI-enhanced social engineering
Voice cloning, deepfake video calls and AI-generated scripts are powering more convincing scams and mule recruitment efforts.
Speed of attack vs. manual response
Fraud occurs in real-time. Manual checks do not. Institutions with fragmented systems struggle to detect early patterns, giving criminals windows of opportunity.
The takeaway is clear: AI is accelerating fraud beyond the capability of legacy controls, and organisations recognise the urgent need for more adaptive fraud prevention, stronger behavioural analytics and unified visibility across customer risk.
Investment Priorities: Automation, Fraud Detection and Unified Risk Platforms
Even with flat or tightening budgets, organisations are becoming more strategic about where they invest. Instead of expanding their vendor stack, teams are prioritising investments that enhance efficiency, consolidate workflows and provide better risk intelligence.
Three investment drivers stood out:
1. Automation to reduce operational pressure
As onboarding volumes grow and fraud sophistication rises, automation is becoming essential across:
- KYC decisioning
- AML case triage
- Document and identity review
- Ongoing monitoring
Automation supports leaner teams while improving consistency, auditability and time-to-yes.
2. Orchestration and vendor optimisation
Institutions aim to reduce reliance on fragmented vendor stacks. Intelligent orchestration helps:
- Improve match rates
- Reduce customer friction
- Lower data vendor costs
- Support dynamic, risk-based verification flows
3. Richer analytics and monitoring
Teams want greater visibility into:
- Emerging fraud patterns
- Onboarding conversion rates
- Verification outcomes
- Operational bottlenecks
Consolidated analytics enable organisations to proactively identify risks, meet reporting obligations and strengthen compliance postures.
A clear trend is emerging: investment is shifting from isolated point solutions toward unified platforms that connect onboarding, identity verification, fraud detection and AML compliance.
Where Financial Institutions Want to See the Most Improvement
Respondents’ feedback highlighted several broad aspirations for how modern onboarding and compliance should operate:
1. Smarter, more adaptive identity verification (IDV)
Flexible flows that adjust based on data quality, user context and risk signals.
2. Increased automation across KYC/AML and fraud operations
Reducing manual reviews and enhancing consistency with machine-driven decisioning.
3. Improved system interoperability and data unification
A clearer, consolidated view of customer identity and risk across the lifecycle.
4. Stronger support for digital identity frameworks
Including mobile driver licences (mDLs), reusable credentials and document-free verification.
5. Operational simplicity and clarity
Faster resolutions, clearer communication and streamlined compliance workflows.
These themes reflect a clear industry shift toward more intelligent, integrated and adaptive risk operations.Industry Outlook: The Three Big Shifts for 2026
1. Doing more with flat budgets
Efficiency, consolidation and automation will define compliance and fraud operations next year.
2. AI as both a threat and a transformative capability
Institutions will lean into AI for risk scoring, anomaly detection, fraud orchestration and automated compliance - even as they defend against AI-powered fraud.
3. A decisive move toward unified risk and onboarding ecosystems
Fragmented stacks are giving way to consolidated platforms that unify KYC, IDV, fraud detection and AML into one coordinated environment.
Conclusion: A Transformative Year Ahead
2026 will be a defining year for financial institutions across banking, fintech and digital assets. Regulatory pressure is intensifying, AI-driven fraud is accelerating and customer expectations for seamless digital onboarding continue to rise.
Our 2025 customer survey confirms that the industry is ready for change and actively pursuing smarter, more integrated and more resilient approaches to onboarding, fraud and compliance.
Institutions that embrace adaptability, intelligence and unified risk infrastructure will be best positioned to navigate rising AML demands, evolving fraud threats and the next era of digital financial services.
Let’s Talk About What’s Next
FrankieOne works with leading financial institutions to simplify onboarding, strengthen AML/CTF compliance and stay ahead of emerging fraud trends.
As you map out your 2026 priorities, now is the right time to ensure your onboarding and risk infrastructure is ready for what’s ahead.
If you’re ready to explore how unified onboarding and risk infrastructure can transform your 2026 roadmap, you can book a conversation with our team today.
