KAREN JOY BACUDO

Finance Editor

ThetaRay has published a survey showing that 88% of UK banking customers would switch providers after failures to prevent financial crime. The findings suggest consumers are increasingly sensitive to anti-money laundering controls and sanctions breaches.

The survey of 1,023 UK respondents found that 87% would also discourage others from using a bank linked to money laundering or sanctions violations. Meanwhile, 81% said anti-money laundering effectiveness is now a leading factor when choosing a new financial provider.

The results indicate that customers no longer see compliance issues only as regulatory matters, but as part of the basic trust they place in a bank or fintech provider. That shift comes as consumers have more options to move accounts and compare digital services.

Even so, established banks remain dominant. The report found that 68% of respondents still rely on high-street banks, while 28% have integrated a fintech service into their main banking arrangements.

Trust and friction

The data highlights a tension between security checks and customer experience. While 88% of respondents said they currently trust their banks, that confidence appeared vulnerable when institutions failed to explain delays, account reviews, or transaction freezes.

The findings show that 96% of consumers want real-time transparency when a transaction is frozen. Repeated inconvenience from security checks would prompt 80% to change providers.

Digital onboarding emerged as another pressure point for banks and fintech groups. Seven in 10 respondents said the speed and clarity of onboarding determine whether they complete an application or abandon it.

The same concern extends beyond the first interaction. The report found that 96% now expect clear explanations of onboarding requirements and of security-related delays. In comparison, 92% said that vague requests, unexplained delays, or a lack of context during periodic customer reviews would reduce their trust.

Only 7% of those surveyed were neutral on that point, and none disagreed. The figures suggest many customers now see communication around compliance procedures as part of the service itself, rather than a separate regulatory process.

Rising penalties

The survey comes amid increased enforcement activity. ThetaRay cited publicly available data showing that regulators worldwide imposed penalties totalling USD $3.8 billion in 2025.

That environment appears to be shaping consumer expectations. The report found that 83% of respondents would actively consider switching providers if their bank or fintech company were fined heavily for financial crime violations.

ThetaRay argues that older rule-based monitoring systems are struggling to balance crime detection with customer convenience. Banks have long faced criticism for generating a high volume of false positives, which can lead to blocked payments, additional document requests, and account reviews that customers may find difficult to understand.

Brad Levy, Chief Executive Officer at ThetaRay, said the findings show how directly compliance now affects customer retention. “Compliance has moved from back office to front-line engine for customer retention,” he said.

He added that customer mobility has raised the commercial stakes for banks. “Switching banks is no longer a major barrier for consumers, and they expect trust, convenience and strong AML practices from their financial institutions,” Levy said.

Garima Chaudhary, Vice President, Financial Crime & Compliance AI at ThetaRay, said traditional systems are contributing to the strain.

“The data proves that legacy, rule-based systems are creating a double-edged risk: they are both too wide a net for modern criminals and too rigid for the modern consumer,” she said.

She said financial firms need a different approach to avoid reputational and customer losses. “For leaders, AI native infrastructure is now the only way to protect brand equity and prevent mass deposit flight,” Chaudhary said.

The research was conducted by Centiment on behalf of ThetaRay and was designed to be representative of the UK population across age groups. The findings underscore how far financial crime controls, once viewed mainly as an internal risk and regulatory concern, have become a visible part of the customer relationship.