Building the Financial Crime Team Around Your MLRO

Every regulated firm within the scope of the Money Laundering Regulations needs an MLRO. Far fewer think carefully about the team that MLRO will need as the business grows. In a small firm, one person can oversee customer due diligence, transaction monitoring, sanctions screening and suspicious activity reporting. In a growing payments firm, crypto business, lender or bank, that quickly becomes impossible, and the gaps tend to appear exactly where regulators look first: backlogs of alerts, overdue customer reviews, inconsistent decisions and an MLRO too busy firefighting to oversee anything.

This article looks at the financial crime roles regulated firms typically add around the MLRO, the signs that each one is needed, and what good candidates look like.

Why the Team Matters as Much as the MLRO

The MLRO is personally accountable for the firm’s anti-money laundering systems and controls, and is usually the nominated officer who decides whether suspicions are reported to the National Crime Agency. But accountability is not the same as doing all the work. The FCA’s Financial Crime Guide makes clear that it expects firms to have adequate resources for financial crime controls, and the industry guidance published by the Joint Money Laundering Steering Group describes the systems and controls a well-run function should have in place.

When supervisors review a firm’s financial crime arrangements, they rarely find that the MLRO lacks knowledge. Far more often, they find that the MLRO lacks capacity: too few people, the wrong skills in the team, or work that has been delegated without proper oversight. Building the right team around the MLRO is therefore one of the most effective ways a firm can reduce its regulatory risk.

The Roles Firms Add, and When

Not every firm needs every role. A small wealth manager might never need more than a deputy MLRO and outsourced screening. A fast-growing payments or crypto firm might need most of them within two or three years of authorisation.

The Deputy MLRO: Usually the First Hire

For most firms, the first addition to the team is a deputy MLRO. The role solves two problems at once. It gives the firm cover when the MLRO is absent, which matters because suspicious activity decisions can’t always wait. And it creates a successor, which matters because MLROs move between firms regularly and replacing one at short notice is difficult.

A good deputy MLRO has hands-on experience of investigating internal suspicion reports and drafting suspicious activity reports, understands the firm’s risk assessment, and can make sound decisions independently. Many firms use the deputy role to develop someone who will eventually hold SMF17 themselves, which means giving them real responsibility rather than simply administrative support.

Sector Differences

The shape of the financial crime team depends heavily on the business.

Payments and e-money

High transaction volumes and fast-moving fraud typologies make transaction monitoring and fraud the priorities, with sanctions close behind for firms with cross-border flows. These firms often need monitoring analysts and a monitoring lead earlier than they expect.

Cryptoasset businesses

Blockchain analytics, the travel rule and the risks of unhosted wallets require specialist skills. Experienced crypto financial crime professionals are scarce, so firms often build teams that combine crypto specialists with experienced professionals from payments or banking.

Wealth management and private banking

The emphasis is on enhanced due diligence, source of wealth and politically exposed persons. Teams tend to be smaller but more senior, with investigative experience valued highly.

Consumer credit and lending

Fraud prevention, affordability-related checks and customer vulnerability sit alongside anti-money laundering work, often within a combined financial crime function.

Banks and building societies

Larger, more structured functions with specialist teams for each area, and a head of financial crime who may or may not also hold SMF17.

Sanctions: A Specialism in Its Own Right

Since 2022, sanctions have become one of the most demanding parts of financial crime compliance. The volume and speed of designations, the complexity of ownership and control tests and the strict liability approach to civil penalties have made sanctions expertise a distinct skill set. The Office of Financial Sanctions Implementation publishes guidance and enforcement notices that show how seriously breaches are treated. Firms with international customers or payment flows increasingly appoint a dedicated sanctions lead rather than leaving sanctions as one task among many.

Hiring the Team: What to Look For

Whatever the role, a few qualities distinguish strong financial crime candidates:

• Judgement over process. The ability to decide whether something is genuinely suspicious, rather than simply following a checklist.
• Clear writing. Suspicious activity reports, case notes and board reporting all depend on it, and law enforcement relies on the quality of what firms submit.
• Sector-relevant experience. Typologies differ widely between payments, crypto, wealth and lending.
• Comfort with data and systems. Monitoring, screening and analytics tools are central to modern financial crime work.
• Independence. The confidence to challenge the business when commercial pressure pushes against good controls.

Specialist recruitment helps here, because the best financial crime professionals are often not actively looking and the market for experienced people is competitive. SMF Capital’s page on financial crime leadership recruitment covers the senior roles around the MLRO, including heads of financial crime, deputy MLROs and sanctions and investigations leads, and how searches for them are run.

Interim and Outsourced Support

Not every gap needs a permanent hire. Firms facing a remediation programme, a backlog of periodic reviews or a skilled person review often bring in interim financial crime specialists for a defined period, and many outsource routine screening or first-level alert handling to specialist providers. Both can work well, provided someone senior inside the firm oversees the work and owns the decisions. Outsourcing tasks never outsources accountability: the MLRO and the board remain responsible for the outcome, so any interim or outsourced arrangement should come with clear reporting, quality checks and an exit plan.

Growing the Team in the Right Order

Firms that build their financial crime function well tend to follow a similar pattern. They appoint an experienced MLRO first and give them a realistic budget. They add a deputy MLRO early, both for cover and for succession. They then add capacity where the risk and volumes are highest, usually transaction monitoring, onboarding or sanctions. And they introduce independent testing once the function is large enough that the people running controls shouldn’t be the only ones assessing them.

Two common mistakes are worth avoiding. The first is hiring junior analysts without anyone senior to supervise them, which increases volume without improving quality. The second is waiting for a supervisory visit or an audit finding before investing, which usually means recruiting under time pressure. Planning a year ahead, based on expected growth in customers, products and markets, is almost always cheaper and less disruptive.

Supporting the MLRO, Not Replacing Them

Building a team doesn’t reduce the MLRO’s accountability. The MLRO remains responsible for the effectiveness of the firm’s anti-money laundering arrangements and for the decisions taken in their name. What a good team does is let the MLRO spend their time where it matters: on the risk assessment, on difficult judgements, on challenging the business and on giving the board an honest picture. For firms looking to strengthen this area, SMF Capital also recruits the senior specialists who sit between the MLRO and the operational teams; see its financial crime recruitment page for the roles it covers.

A well-built financial crime team is one of the clearest signals a regulated firm can send to its supervisor that it takes its obligations seriously. It is also the best protection the MLRO has.