New white paper calls for effective AML due diligence

A new white paper advising regulated businesses, including estate agents, to stop using manual methods for onboarding clients has been published by anti-money-laundering specialist SmartSearch

The paper, based on a survey of decision makers from 500 regulated businesses in the UK, revealed that a high number of financial services firms are witnessing increased fraudulent activity, but that many are still using manual procedures to confirm client identities.

The survey found that more than half – 51% – of respondents surveyed had seen a rise in financial-crime attempts in the last year.

Responses also indicated that a third – 33% – use manual checks when onboarding new customers, more than a third – 35% – prefer using hard-copy documents for establishing identity, while almost a third – 29% – take up to a week to process hard-copy documents.  A quarter said they were “highly confident” that they could spot a fake document.

The white paper is part of SmartSearch’s ‘Electronic Verification Uncovered’ campaign, which aims to raise awareness of the dangers of relying on traditional methods of identity verification for regulated businesses.

Martin Cheek, managing director at SmartSearch, said the increase in fraudulent attempts should drive businesses to move away from manual methods.

He explained: “The findings of our white paper demonstrate a worrying amount of faith in traditional methods. This trust in manually identifying fraudulent documents is particularly concerning, as criminals are using sophisticated methods to try to deceive.

“With record fines being handed out for money laundering failures, regulated businesses need to ensure they are doing everything they can to prevent fraud.”

Cheek continued: “To prevent money laundering, businesses need to fight fire with fire. As criminals are embracing technology, those aiming to prevent criminal activity need to embrace electronic verification.

“This works by using credit reference data, combined with other reliable sources, creating a unique ‘composite digital identity’ which is virtually impossible to fake. SmartSearch’s system can complete a check in just two seconds.”

He added: “With the wave of fraud not going anywhere anytime soon, regulated businesses should make the switch to electronic verification as soon as possible.”

Last month, London conveyancing solicitors, Mishcon de Reya were fined £232,500 for breaching money-laundering rules, after admitting failure to secure adequate due diligence on four clients and misplacing evidence of the diligence that had been carried out.”


High profile conveyancing firm fined £232,500 over AML failings


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