A lack of trust in technology is leaving some regulated firms, including estate agencies, vulnerable to financial crime, according to anti-money laundering software provider SmartSearch.

A study by the company found that nearly one in five (18%) decision makers in the property, legal and banking & finance sectors did not trust the technology of electronic verification software.

In the survey of 500 stakeholders from regulated businesses across the UK, almost a third of respondents said they believed EV was too costly and nearly a quarter (23%) said they thought hard copy documents remained a more reliable option. According to SmartSearch, however, relying solely on hard copy documents leaves firms more vulnerable to money laundering.

“Our research demonstrates a worrying market perception,” said Martin Cheek, managing director at SmartSearch. “Not only is the adoption of electronic verification the best way for regulated businesses to ensure they are insulated from potential money laundering crimes, but its use is recommended in the 2020 Money Laundering and Terrorist Finance Act. The act recommends that regulated firms use EV as part of their due diligence to make it as effective as possible.

“It is disappointing that such a high number of regulated firms are unaware of this advice,” Cheek added.

Earlier this month it was revealed by HMRC that 68 estate agents had been fined a total of £519,645 for non-compliance with rules designed to prevent criminals laundering money. Cheek said the fines showed an “urgent need” to improve standards in the sector. He also commented that the total of 175 regulated businesses receiving penalties adding up to £2.1m should act as “a wake-up call”.

The SmartSearch survey revealed that almost a quarter (23.5%) of respondents were using documents like passports for identification purposes, although one in ten of them also confided that they lacked the confidence to spot a fake.

“EV has become invaluable in combating money laundering across all sectors and it is crucial that UK businesses maintain support for advancements in technology,” Cheek added.

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