Half of regulated businesses in UK report increase in financial crime


Almost half (48%) of regulated businesses in the UK have reported an increase in attempted financial crime in the past 12 months, with an additional 26% confirming that they themselves have been victims, according to a study by SmartSearch.

The survey of 500 regulated companies in the financial, legal and real estate services sectors found that only 25% saw no change in the level of attempted financial crime.

Law firms, including transport agents, were the hardest hit, with 33% reporting being victims of financial crimes.

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The results are part of the SmartSearch Electronic Verification Uncovered campaign and reflect unprecedented pressure in the real estate market during a long, hot summer for home sales.

There was also significant variation between regions in the UK, with 64% of regulated businesses in the East Midlands reporting an increase in attempted fraud, compared to 55% in London.

SmartSearch said the increase in financial crime and money laundering was mainly due to security loopholes that opened up due to the pandemic, as companies rushed to adapt to new working practices. .

Implementing processes such as Know Your Customer (KYC) checks and due diligence required by anti-money laundering regulations became increasingly difficult as face-to-face meetings were banned.

The SmartSearch survey also found that a significant number of businesses (13%) were unaware of the change.

John Dobson, CEO of SmartSearch, said: “There is no doubt that conditions since the coronavirus outbreak are ripe for criminals to seize the opportunity for money laundering and other fraudulent activity in the market. immovable.

“They were able to do this because many companies still rely on manual verification methods when onboarding new customers.

“Even so, the fact that half of the companies we surveyed reported an increase in criminal activity underscores the magnitude of the problem.

“The most effective way to avoid this is to move to a digital solution that eliminates the need to dig through documents that are easily tampered with by today’s organized crime gangs.

“In September 2020, the Money Laundering and Terrorist Financing Law recommended a switch to electronic verification, so it is worrying that more than one in ten businesses are still not aware of it.

“This is a key development in the AML industry because a digital platform ensures that your business is 100% FCA compliant at all times.

“This avoids the risk of punitive fines or even criminal prosecution for non-compliance if your business is in violation.

“The message for regulated companies that emerges from these findings is that the move to electronic verification is the smart thing to do, providing confidence through automated perpetual KYC processes.

“If the country is on the brink of another lockdown this winter, it is critical that businesses are not trapped by not having the right tools to avoid business disruptions.”

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