What are Suspicious Activity Reports and how do they combat financial crime?

Welcome to our blog the first of a series on suspicious activity reports (SARs) within the UK anti-money laundering (AML) regime. We will lay out the current status of suspicious activity reporting and highlight how important SARs are in combating a variety of crimes — economic and other. We will also examine examples where effective SARs have helped to combat a range of criminal activities, as well as recommending how reporting can be improved.  

In this piece, we focus on what SARs are, as well as summarise feedback from experts on current SAR practice and explain how reporting can be enhanced. Although our blog will blog series will focus on SARs within the UK AML regime, the content will be useful to AML practitioners working in similar reporting systems elsewhere.

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What are Suspicious Activity Reports?

A SAR is a document which must be filed by a financial institution or associated business with the NationalCrime Agency (NCA) whenever an economic crime is suspected.The legal purpose of filing a SAR is to report on any suspicious activity by an entity, business or individual which raises the suspicion of money laundering or terrorist financing. Suspicious activity reports SAR sare investigated by the UK Financial Intelligence unit (UKFIU), which sits within the NCA.

SARs form a core part of the strategy of law enforcement in their battle against money laundering money laundering, terrorist financing, fraud, and other financial crime financial crime. The intelligence they provide on suspected criminals includes information such as phone numbers, addresses, company details, investment activity, bank accounts and details of other assets.

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Who should file Suspicious Activity Reports?

Suspicious activity reports SARs are required of anyone working in a regulated sector, primarily by part 7 of the Proceeds of Crime Act 2002 (POCA)and the Terrorism Act 2000, with support from the Money Laundering Regulations (MLRs) of 2017. It is possible that people and organisations working outside the financial sector may need to file SARs as well, and firms should seek clarity from their industry regulators, professional bodies, or legal advisors on what their obligations are.  

The Financial Conduct Authority (FCA) published its Extension of Annual Financial Crime Reporting Obligations in August 2021. It noted that currently only banks, building societies or companies with total annual revenues of £5 million or more must provide their financial information to the FCA if expected, but proposes widening the net considerably, targeting electronic money facilities, multiple types of trading platforms, and crypto asset providers.

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When should a Suspicious Activity Report be filed?

Firms should file a SAR whenever they suspect an economic crime has been committed or when they spot weakness and failure in their AML compliance process. Examples of this include computer hacking, insider activity and more.

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How are Suspicious ActivityReports used to combat financial crime?

Within the broader AML regimein the UK, SARs are used by law enforcement agencies and regulators to combat arange of crimes. The intelligence contained in SARs helps to thwart sexoffenders, trace murder suspects, catch tax evaders, and crack online childpornography rings. Single SARs can be used by multiple agencies for differentpurposes, and multiple SARs can be used to target single crimes. This is inaddition to combating money laundering, terrorist financing, fraud, tax evasion, and other serious economic crime.

The NCA’s 2024 Annual SARs Report noted the following overall successes for law enforcement during the period:

- 872,0485 SARs were received and processed, up 1.5% from the previous reporting period.

- £240.1 million was denied to possible criminals suspected of money laundering, down 12% from the previous reporting period. There was an increased number of cases where assets were denied however the total value is lower than the previous period.

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You can read about case-by-case SARs successes in 2020 for the UKFIU and other agencies in the regularly released SARs Reporter Booklet May 2025 edition.

Although the usefulness of good suspicious activity reporting is noted, the increase in money laundering and other financial crimes (on average, the UKFIU receives over 800,000 SARs per year), is a clear indication that all players in the AML regime must work together to finally beat the criminals. Reporters, law enforcement agencies, supervisors, regulators, trade bodies and other relevant partners will need toco-operate closely now and in the future.

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What makes a good Suspicious Activity Report and how can they be improved?

We have seen that well-written SARs can be highly effective in combating financial crime. The UKFIU guidelines emphasise conciseness, thoroughness of the information provided, and clarity about the reasons for suspicions being raised. A SAR Glossary Codes and Reporting Routes booklet, which is regularly updated, is also available.

The UKFIU also tracks areas in reporting which can be improved, since inadequate reports hamper the NCA’s allocation of resources and impede law enforcement agencies from making informed judgments about actions to take. The challenging areas usually pertain to information being incomplete or absent, for example:

• The full name of the subject, including all identifying features (birth date, address, passports, driving licenses, etc.).
• The subject’s occupation and/or employment status and history.
• A detailed, concise explanation of the alleged behaviour, which clearly outlines how, when, and why suspicions were raised.
• Details of other individuals who may be involved in the transaction(s) under review.

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How can Napier assist your business with improved SAR reporting?  

Napier AI founder, Julian Dixon, noted that enhanced AML regulation is to be lauded in general. However, he said the UK government’s proposal to overhaul the AML regime as laid out in the 2019 Economic Crime Plan is hampered by the sheer scale of the task, which is further complicated by the impact of the pandemic. The result is that the overhaul is not happening quickly enough. With 800,000 SARs being filed every year, he believes the solution lies in digital automation.

“Let’s leave the human regulators to focus on the high priority investigations, while all the dirty work of checking the myriad SARs can be carried out by automated software systems,” he said.

As a specialist AML compliance technology provider, Napier AI can help your organisation streamline its SAR reporting processes with cutting-edge technology and AI-powered digital automation. You can request a demo here.