The Financial Action Task Force (FATF) released its updated guidance in June 2025 to bring international Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) efforts in line with the broadening agenda for financial inclusion. This policy shift reflects the growing world consensus that financial security and access to finance need not be adversaries. Conversely, the new guidance states that exclusion from the regulated financial system may undermine compliance objectives by pushing vulnerable individuals into informal or illegal markets.
By embedding financial inclusion within its risk-based approach (RBA) in a specific way, FATF has encouraged regulators and banks to redefine their conceptualization, management, and mitigation of financial crime risks. The guidance warns against over-de-risking—a trend where banks completely disengage from customers or regions perceived to be high risk—while instead encouraging judicious risk assessment that still supports access to legitimate consumers, particularly in underserved geographies and communities.
Components and principles of FATF’s new guidance
The revised FATF framework places emphasis on national judgment when applying proportionate risk mitigation. Countries are also required to update their National Risk Assessments (NRAs) to include financial exclusion as a possible systemic risk. It redefines access to finance as a security concern rather than a social or development concern. The guidance requires countries to balance their AML/CFT policies with requirements of financial access through policy-making which keeps access points to the formal economy open for lower-income, distant, or unregistered populations.
Simplified customer due diligence (CDD) for low-risk customers is encouraged under minimum identification, transaction size, and monitoring controls. Regulators should work together with private-sector actors to develop innovative flexible onboarding procedures, particularly where there is minimal documentation coverage in countries. The strategy espouses the idea of inclusive finance as a tool for transparency and resilience, rather than an inherent vulnerability.
Digital technologies and identity innovation
To support these goals, the guidance invites the deployment of digital identity infrastructure as a cornerstone of inclusive compliance. FATF urges jurisdictions to improve or deploy interoperable digital ID systems allowing banks and fintechs to verify customer credentials with assurance. In the absence of functioning civil registration systems, the guidance advises the exploration of biometric-based or third-party-verified digital identity services, provided that privacy protection is ensured.
The new guideline also highlights the incorporation of regtech solutions—like artificial intelligence, machine learning, and real-time transaction monitoring—as means to improve compliance effectiveness and client experience. Such technologies can flag suspicious patterns of behavior without triggering an unnecessary number of false positives, allowing financial institutions to have bigger client bases without overloading compliance units.
Global implementation and real-world impacts
FATF’s updated stance has already influenced regional financial reform agendas. Within the European Union, the establishment of the Anti-Money Laundering FATF’s new stance has already impacted regional financial reform agendas. In the European Union, the establishment of the Anti-Money Laundering Authority (AMLA) is reorganizing coordination among member states. AMLA’s centralized monitoring facilitates uniform application of the RBA with financial inclusion indicators now guiding supervisory benchmarks.
In the Asia-Pacific region, countries like Australia and Singapore have leveraged digital innovation to tailor compliance systems. Australia has used e-KYK protocols to enable financial inclusion within indigenous and remote communities. Singapore’s regulation-driven sandbox encourages banks to test inclusion-led technologies under regulatory oversight.
Many African nations, including Senegal and Kenya, are making national policies conform to FATF standards as a step up from grey to green lists. Although challenges remain, particularly in documentation coverage and infrastructure, the change of policy has spurred domestic reforms. In Latin America, Argentina’s central bank published updated regulations mid-2025, opening account access with tiered CDD framework, an act it has construed as being directly influenced by the emphasis placed by the FATF on proportionality.
Private sector adoption and compliance transformation
Financial institutions have responded in mixed but ever-more sophisticated ways. Regional fintech firms as well as international banks are applying regtech to digitize transaction monitoring, onboarding, and identity verification. Such tools enable compliance officers to differentiate high-risk activity from genuine activity even for long-excluded or unbanked customer segments.
Startups are also innovating in response to FATF’s new standard. In Eastern Africa, mobile money providers have partnered with biometric ID platforms to reach rural clients. In South Asia, cooperative banks are piloting efficient compliance templates for low-income women, recognizing gender disparities in access to formal finance. These innovations represent a wide spread of inclusive finance into hitherto excluded segments by dogmatic AML approaches.
The balance of risks and opportunities
FATF clearly warns that exclusion can itself fuel illicit finance. Excluded populations turn to unregulated money transfer systems, which have no traceability and no risk limit to fraud, trafficking, or terrorist finance. The guidance reframes the discussion: the expansion of access to secure, regulated financial services is not merely a development objective but a pillar of global security architecture.
By adopting the principle of proportionality, FATF stresses that ideal AML/CFT controls must be relevant to context. Adopting a catch-all, one-size-fits-all system can prove to be counterproductive, particularly in weak states or war zones. Authorities are called upon to include local patterns and economic trends while designing control mechanisms, rendering responses proactive but not exclusionary.
Public confidence and political will
The success of FATF’s depends heavily on political commitment. To build public trust in financial systems in post-conflict or authoritarian environments requires transparent implementation and effective supervision. Cooperation between ministries of finance, central banks, civil society, and international partners is required to meet the dual goals of integrity and inclusion.
They have debated the topic, saying FATF’s 2025 guidance is a significant step toward making AML compliance regimes facilitate rather than hinder vulnerable groups’ access to formal financial services around the world:
Their emphasis on inclusion is something that rings true with broader recognition that financial systems must evolve to serve the needs of the whole population without compromising systemic protections.
A new chapter in AML policy convergence
The 2025 FATF guidance represents a paradigm shift in global financial regulation. It challenges stakeholders to go beyond enforcement thinking and into system design developing compliance systems that are risk-aware but not prohibitive, digital but people-oriented, and consistent internationally but reactive domestically.
With financial systems quickly becoming digitized, the success of these values will be decided in various regulatory and socio-economic contexts. For some jurisdictions, success will be based on technical support and mobilization of resources; for others, it will be coordinating legacy institutions with emerging technologies. Ultimately, FATF guidance creates a framework not just for minimizing harm, but also for building opportunity. Whether the global financial system is able to leverage that opportunity in justice and prudence will shape the future of global inclusion.