The paper is part of the firm’s continuing electronic verification campaign
Compliance software provider SmartSearch has published an agenda-setting white paper to highlight the anti-money laundering deficiencies and sanction loopholes which continue to allow up to £100 billion of illicit wealth to impact the UK economy every year.
The paper is part of the company’s continuing ‘Electronic Verification Uncovered’ campaign, which aims to raise awareness of the dangers of relying on outdated, manual methods of identity verification for regulated businesses.
Its findings are based on a survey of 500 decision-makers in regulated firms from the finance, legal, banking, and property sectors.
The survey found that almost half of regulated firms have seen a rise in criminals attempting to launder money or commit financial crime, and that despite the increased threats, a quarter of regulated firms admit to still using manual checks on easily forged hard-copy documents like passports and utility bills. In addition, nearly half of all regulated firms fail to check for ‘ghost firms’ used by criminals as part of a corporate infrastructure designed to hide the connection of criminal beneficiaries.
However, as a growing number of firms feel the increasing weight of AML compliance, more than three quarters are considering a switch to electronic verification (EV).
“The use of electronic verification is recommended in the 2020 Money Laundering and Terrorist Finance Act,” Martin Cheek (pictured), managing director at SmartSearch, said. “Our Electronic Verification Uncovered campaign shows there is still a widespread and worrying reliance on the use of paper and manual methods of customer verification.
“These outdated practices are leaving regulated firms open to AML and sanctions breaches, which come with eye-watering, record fines, and significant reputational damage.”
Cheek pointed out that as criminals and money-launderers become increasingly sophisticated, regulated firms need the technology of EV to meet them head-on.
“EV uses credit reference data, combined with other robust sources, to create an efficient, cost-effective and fully compliant, perpetual know your customer (KYC) solution which can complete checks in seconds. It fulfils KYC and AML obligations, as well as producing watertight compliance audit trails,” he added.
“In short, EV allows regulated firms to take control of their compliance. It also allows them to control their costs and improve their own customer journeys.”
A copy of SmartSearch’s AML white paper can be requested online.
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