How aware are regulated firms of compliance?

Surveys conducted almost one year apart have shown that regulated firms have improved their understanding of, and commitment to compliance.

Anti-money laundering (AML) platform SmartSearch surveyed 500 decision-makers in the property, legal, and finance and banking sectors in June 2021, and again in May 2022. The results implied that the message about compliance does seem to be getting through to many regulated companies.

SmartSearch noted that in 2021, 9% of the firms surveyed admitted to not verifying the identity of new individual customers. By May 2022, that figure had dropped to just 1%. In addition, 13% of those surveyed in 2021 said they either didn’t or weren’t sure if they checked on the owners or directors of new business customers. In 2022, that figure had more than halved to 6%.

Meanwhile, the reliance on hard-copy documentation like passports or driving licences to identify new customers dropped from 28% of companies in 2021 to 22% this year. In 2021, 63% of the firms surveyed said they would consider switching to electronic verification (EV), but in 2022, 83% of firms were considering the switch.

Read more: Majority of regulated firms planning switch to electronic verification - report.

“AML and sanctions regulations are weighing heavily on many regulated firms, so it’s a welcome change to see some positive moves forward,” Martin Cheek (pictured), managing director of SmartSearch, said. “As AML and sanctions compliance become more complex, and the government hands out an increasing number of fines for breaches, it’s encouraging to see a significant increase in the number of firms identifying EV as the quickest and most effective way to navigate the compliance minefield.

“EV can carry out identity and sanctions checks on new and existing customers without the need for manual verification. EV solutions will save regulated firms time and money and help them to minimise the risk of breaking the rules.”