This follows the release of the treasury consultation paper on the European Union’s (EU) third money-laundering directive.
The paper, which proposes extending EU legislation with regards to the financing of terrorists, calls on financial institutions to report all suspicious transactions and take greater responsibility when it comes to their Know Your Customer (KYC) obligations.
Mel Mitchley, director of industry relationships at Callcredit, commented: “Our initial reaction to the paper is that it sets out the implementation of the directive in an effective and proportionate way, although it leaves little doubt that in order for it to work businesses need to be proactive in their KYC undertakings.
“With KYC already proving to be a major business challenge, this additional emphasis on it is likely to continue to cause concern amongst business’ already struggling to cope with the demands of carrying out all the required verification and monitoring protocols.”
Mitchley added: “Electronic solutions are now widely accepted as the most cost-effective, reliable and consumer-friendly method of identity verification for prevention of money laundering. I’m sure their usage will become even more widespread once the directive comes into force.”
