Coadjute Enters FCA's AI Testing Sandbox for Anti-Money Laundering Checks
Coadjute, a compliance platform backed by Lloyds Banking Group, NatWest and Nationwide, has been accepted into the Financial Conduct Authority's AI Live Testing Sandbox. The move allows the company to test artificial intelligence tools for anti-money laundering compliance in a controlled environment with direct regulator oversight.
The timing matters. In October 2025, the UK Government confirmed that the FCA will become the single supervisor for anti-money laundering across professional services, replacing the Solicitors Regulation Authority. This shift signals a move from guidance-led oversight to enforcement-driven regulation.
What conveyancers should expect
Conveyancing firms face significantly tighter scrutiny under the new framework. Regulators will focus less on documented policies and more on whether AML controls actually work in practice.
Expect more frequent "skilled person" reviews, greater enforcement activity, and higher compliance costs. Regulators will scrutinize source-of-funds and source-of-wealth analysis with particular intensity, requiring firms to demonstrate evidence-based risk assessment rather than relying on basic document collection.
The transition period creates additional complexity. Both the SRA and FCA may conduct overlapping investigations through 2026. Industry experts recommend firms act now: strengthen internal controls, improve data quality and record-keeping, and ensure senior management accountability for compliance outcomes.
How Coadjute's platform addresses the shift
Coadjute built its platform around AI from the ground up, embedding automation throughout AML workflows. The system combines identity verification, source-of-funds analysis, enhanced due diligence, and audit-ready reporting designed to withstand increased regulatory scrutiny.
The company recently introduced "Clara," a digital assistant that guides buyers and sellers through AML processes while ensuring accuracy and completeness. The tool demonstrates how AI can improve both compliance outcomes and client experience.
Jessica Rusu, chief data, information and intelligence officer at the FCA, said: "Our new AI Live Testing service helps firms who are ready to use AI in live markets. We're helping to make sure that AI is developed and deployed safely and responsibly in UK financial markets."
John Reynolds, co-founder and COO of Coadjute, said: "Conveyancers are entering a new era of AML regulation - one that demands demonstrable effectiveness, not just good intentions. Our acceptance into the FCA's AI Live Testing Sandbox is a significant step forward, not just for Coadjute, but for the entire industry."
For professionals in insurance and financial services, the regulatory shift signals broader changes ahead. AI for Insurance and AI for Legal applications will increasingly be expected to demonstrate measurable effectiveness, not just theoretical compliance.
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