The most recent round of fines handed out to 68 estate agents by HMRC for breaches of anti-money laundering rules might make it appear that many regulated firms are still not taking their compliance responsibilities seriously, but that is not the case according to SmartSearch.

Research carried out in two tranches by the anti-money laundering (AML) platform found that the message about compliance does seem to be getting through to many regulated companies.

SmartSearch surveyed 500 decision-makers in the property, legal and finance and banking sectors in June 2021 and again in May 2022 and, in many key areas, regulated firms had improved their understanding of and commitment to compliance.

For example, 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%. And, in 2021, 13% of those surveyed said they either did not or were not 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 – and easily forged – documentation like passports or driving licences to identify new customers dropped from more than a quarter – 28% – of companies in 2021 to a less than a quarter – 22% – this year.

Martin Cheek, managing director of SmartSearch said: “AML and sanctions regulations are weighing heavily on many regulated firms, so it’s a welcome change to see some positive moves forward.”

One of the biggest data shifts was around the use of electronic verification (EV) to onboard and monitor customers.

In 2021, less than two-thirds – 63% – of the firms surveyed said they would consider switching to electronic verification. In 2022, 83% of firms were considering the switch – an increase of more than 30%.

Cheek added: “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.”