"As the threat of money laundering and financial crime increases, and the burden of compliance grows even heavier, firms must take action and improve both their systems and their processes to avoid becoming victims too"
- Martin Cheek - SmartSearch
A new survey - the third in SmartSearch’s continuing Electronic Verification Uncovered campaign - found that more than a third of property developers have been a victim of financial crime. Little surprise as the data also revealed that just 30% of developers say that they always complete checks to verify the identity of new individual customers.
The Electronic Verification Uncovered campaign argues that businesses should use digital compliance to ensure they properly identify and screen clients - as recommended by the Government in the 2020 Money Laundering and Terrorist Finance Act - to stem the flow of dirty money into the UK and protect firms from the fines and reputational damage which come with breaches.
It follows the Economic Crime Survey earlier this year, which found that the mean annual cost per business for all fraud incidents was more than £16,000.
Meanwhile, 11% of businesses reported annual total costs of over £20,000, while 3% reported costs in excess of £100,000.
As investment in UK property remains a lucrative vehicle for money laundering, the SmartSearch data revealed that 35% often verify the identity of individual customers, while 21% only complete these necessary checks sometimes. On a rare occasion, just over one in 10 property developers said they would ask for proof of identity and verify it manually or electronically.
Martin Cheek, managing director of SmartSearch said: “There’s no question financial crime can have massive implications for businesses. It’s not just the loss of revenue, it’s also the reputational damage and the questions it raises for regulators and authorities about the safeguards and compliance measures in place.
"That’s especially true if businesses are not properly verifying customers – as our survey has revealed.
“As the threat of money laundering and financial crime increases, and the burden of compliance grows even heavier, firms must take action and improve both their systems and their processes to avoid becoming victims too.
"Advancements in digital compliance are helping firms of all sizes mitigate these challenges by not only identifying potential red flags as part of detailed checks but providing constant access to real-time data and intelligence.”
