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AML and Identity Checks: Lessons Learned From the NatWest Case With SmartSearch

NatWest’s landmark money-laundering case has dealt a huge blow to consumer trust in online banking; an industry that more than three quarters (76%) of UK consumers already admit they don’t fully trust, according to research from anti-money laundering specialists, SmartSearch.

The ongoing lawsuit being faced by the high street bank has put others on high alert to the threats and scale of money laundering in the UK, but experts warn this case is the tip of the iceberg when it comes to financial crime in the UK.

So, what can businesses learn from NatWest to avoid the same costly pitfalls? John Dobson, CEO at SmartSearch, shares his insights.

John Dobson CEO SmartSearch
John Dobson, CEO, SmartSearch

The level of distrust towards online systems is a concern, mainly due to the fact that the industry is moving towards a more digitised future, with physical banks closing all the time and more and more comprehensive online services being utilised.

More than eight in ten (81%) Brits say trust is the deciding factor on any purchasing journey, with this in mind, banks stand to lose a significant amount of custom unless they can satisfy people that their online services are safe and secure.

Branch closures are a cost-cutting measure for banks looking to streamline their processes to be predominantly virtual, but if customers are disillusioned and are therefore choosing to bank elsewhere this could cause real financial issues.

To buck this trend and earn back the trust of the consumer, banks and other financial organisations need to make a concerted effort to highlight the security measures and quality checks they have in place when obtaining and storing customers’ personal data.

Often, banks have multi-layered ID and document checks in place, so outlining how these work and highlighting how well protected their data and money really is will go a long way to overcoming the negativity felt as a result of the NatWest case.

Customer trust is shaken

Among the high street banks there really are no two ways about it, your customers must trust that their money is safe with you. Never has this been more prevalent either, with the pandemic forcing many into online banking after the closure of more than 200 branches around the country last year.

With NatWest now facing criminal prosecution after the Financial Conduct Authority (FCA) accused them of failing to appropriately scrutinise numerous suspicious cash payments, this scandal has not only damaged the bank’s reputation but has also impacted consumer trust across the industry.

We know from our research that trust is paramount, so it’s more important now than ever that businesses do everything possible to instil trust among their customer base.

Better electronic identity verification

This isn’t the first time we’ve seen a case of this scale in recent years. Australia’s Commonwealth Bank fell into similar difficulties in 2018 and ended up paying ÂŁ400 million in fines as a result of failing to adhere to the strict AML regulations.

Even in pre-pandemic times, AML procedures and regulations would frequently change and update to ensure they were as robust as possible, which unfortunately makes way for human error. Over the past year, the use of electronic verification has accelerated, as has the need for more rigorous online security checks.

Developing the right procedure before implementing it is key. By adopting a watertight, multi-layered identity check process, you will eliminate the chances of fraud and ensure any suspicious activity is flagged.

Combine the right technology with robust training

Utilising this kind of system whilst ensuring all staff are kept up to speed on AML law and policy will go a long way to preventing any shortfalls in the process, which will ultimately safeguard against failings.

At SmartSearch we have developed an innovative TripleCheck system, requiring all customers to complete a three-stage ID check, including documentation checks, facial recognition and digital fraud and data referencing checks. This approach makes it easy for businesses to identify and eliminate fraudulent activity, helping them to stay AML compliant at all times to avoid sanctions.

To support businesses which are thinking of strengthening their current AML framework with electronic identity verification, here are the key steps to take:

  1. Given how easy it is to create forged copies of hard documents, it’s vital to implement a framework that requires no more than a name, address and date of birth to carry out a full, global search to verify the customer’s ID.

  2. When looking at online solutions, a single platform with multiple database searches is more streamlined and effective than having to check with multiple platforms, such as Equifax, Experian, then another separately.

  3. Check how the business stores customer details. Not all solutions automatically update the database when changes occur, such there are updated PEP lists and so implementing a system that is aligned to make these changes makes the process more foolproof.

  4. You don’t necessarily have to invest huge amounts in new IT infrastructure to submit and receive data. The quickest and simplest access for users is through the browser on your company laptops and desktops, which are safeguarded by heightened security and protection.

  5. It’s vital to check how easy it is for anybody in the company to use. The most advanced technology should be easily accessible for people who need to use it day-in day-out, and not the just IT dept, to avoid any confusion or mistakes when handling personal information.

  6. Ensure the ID verification system you implement includes FCA compliant data records automatically. If your business is required to provide an audit, having a system designed to incorporate detailed records which are fully compliant will save you time.

  7. Using technology such as facial recognition will further enhance the level of certainty when checking an ID. If integrated with global database searches and document verification you can be sure you have a watertight system that meets all regulations.


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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