UK consumers are increasingly treating financial crime controls as a measure of trust in banks and fintechs, according to new research from ThetaRay.

ThetaRay, an AI financial crime compliance company, released its UK Banking & Fintech Trust Report 2026 ahead of The Global RegTech Summit. The report found that 88% of UK customers would consider switching providers if their bank was reported to have failed in preventing money laundering or terrorist financing.

The findings suggest that anti-money laundering (AML), sanctions controls an UK Banking & Fintech Trust Report 2026 d counter-terrorist financing checks are becoming more visible to consumers, particularly when they affect onboarding, payments or account access.

ThetaRay surveyed 1,023 UK respondents. The report covers customer attitudes to trust, onboarding, payment checks, financial crime failures and communication around compliance processes.

Compliance becomes a customer trust issue

The report found that 81% of respondents rank strong compliance with AML and sanctions regulations as a top priority when selecting a financial institution. It also found that 87% would discourage friends or family from using a financial institution linked to money laundering or sanctions violations.

At the same time, trust in existing providers remains high. ThetaRay found that 88% of respondents trust their current financial institutions to prevent money laundering and sanctions breaches.

That creates a narrow margin for error. Consumers may trust banks and fintechs to manage financial crime risk, but the same trust can weaken quickly when failures become public or when compliance processes create repeated disruption.

“Compliance has moved from back office to front-line engine for customer retention,” said Brad Levy, CEO of ThetaRay. “Switching banks is no longer a major barrier for consumers, and they expect trust, convenience and strong AML practices from their financial institutions.”

Customers expect checks to be explained

The report also highlights the customer experience side of compliance. ThetaRay found that 96% of respondents expect onboarding requirements to be clearly explained, while 70% said the time taken to complete onboarding influences whether they continue or look elsewhere.

Payment checks create a similar expectation. The report found that 96% of respondents expect clear context and next steps when a payment or transaction is stopped for compliance or sanctions checks.

Financial crime controls often appear to customers as delays, additional information requests, blocked transactions or account reviews. Customers may accept the need for security checks, but the report suggests they expect institutions to explain what is happening and what they need to do next.

ThetaRay found that 92% of respondents said vague requests, unexplained delays or lack of context during periodic customer reviews would reduce their trust in an institution.

Friction remains a switching risk

The report points to a tension between security and convenience. While consumers value strong financial crime controls, 80% said they would consider switching providers if security measures caused repeated inconvenience, such as delayed payments, repeated identity checks or account freezes.

The top retention factors also show how practical the issue has become. A smooth payment process was the most important factor influencing customer retention, selected by 75% of respondents, followed by clear communication at 68%. Confidence that a provider uses advanced technology to prevent financial crime came next at 56%.

For banks and fintechs, this means financial crime compliance now sits closer to customer experience, not just regulatory operations. Delayed payments, unclear requests and repeated checks can affect trust even when the underlying control is legitimate.

AI claims face explainability test

ThetaRay argues that banks and fintechs need more adaptive systems to reduce unnecessary friction while maintaining strong controls. However, the report also frames explainability as a key requirement as AI becomes more common in onboarding, monitoring and customer interaction.

Garima Chaudhary, VP Financial Crime & Compliance AI at ThetaRay, said: “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. For leaders, AI native infrastructure is now the only way to protect brand equity and prevent mass deposit flight.”

The report says customers, regulators and supervisors increasingly expect institutions to explain how decisions are made, particularly when those decisions affect access to funds or trigger additional scrutiny.

High-street banks remain central

Despite growth in digital banking and fintech, the report found that 68% of respondents still rely primarily on high-street banks as their main financial provider. Digital-only banks accounted for 16%, while 12% said they use both banks and fintechs. Pure fintech platforms, such as payment apps and digital wallets, accounted for 4% as a primary financial institution.

This suggests fintech adoption often complements traditional banking rather than replacing it outright. However, the report also indicates that trust expectations now apply across both groups, particularly as customers use more digital onboarding, payments and verification tools.

For financial institutions, the findings point to a compliance challenge that extends beyond regulatory enforcement. Customers expect banks and fintechs to prevent financial crime, but they also expect fast payments, clear explanations and proportionate checks.