New whitepaper calls for effective AML due diligence – Property Industry Eye

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

The article, based on a survey of decision makers from 500 regulated firms in the UK, found that a large number of financial services firms are seeing an increase in fraudulent activity, but many still use manual procedures to confirm the identity of customers.

The survey found that more than half – 51% – of respondents had seen an increase in attempted financial crimes over the past year.

Responses also indicated that a third – 33% – use manual verifications when onboarding new customers, more than a third – 35% – prefer to use paper documents to establish their identity, while almost a third – 29% – take up to a week to process paper documents. A quarter of them said they were “very confident” of being able to spot a false document.

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

Martin Cheek, managing director of SmartSearch, said the increase in fraudulent attempts should encourage companies to move away from manual methods.

He explained: “The findings of our white paper demonstrate a worrying faith in traditional methods. This reliance on manually identifying fraudulent documents is of particular concern, as criminals use sophisticated methods to attempt to deceive.

“With record fines imposed for money laundering failures, regulated businesses need to ensure they are doing all they can to prevent fraud.”

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

“It works by using credit reference data, combined with other trusted sources, creating a unique ‘composite digital identity’ that is virtually impossible to forge. The SmartSearch system can complete a check in just two seconds.

He added, “With the wave of fraud not going anywhere anytime soon, regulated businesses should move to e-verification as soon as possible.”

London lawyers Mishcon de Reya were fined £232,500 last month for breaching money laundering rules, after they admitted failing to carry out adequate due diligence on four clients and misplaced evidence of due diligence.

High-profile conveyancing firm fined £232,500 for AML breaches