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Complacency Within UK Businesses Could Drive Money Laundering Risks

Over two thirds (68%) of UK businesses think enough is being done to tackle the country’s dirty money problem, despite recent money laundering scandals sweeping the EU and numerous regulatory crackdowns, according to new research released by LexisNexis® Risk Solutions, the analytics provider.

LexisNexis Risk Solutions worked with the Economist Intelligence Unit to survey a range of senior compliance, finance and legal executives from the banking, fintech, legal, real estate, and gambling sectors for its ‘On the Frontline: The UK’s Fight Against Money Laundering’ report, with a view to understanding current attitudes towards money laundering and AML provisions across UK businesses.

Surprisingly, despite the National Crime Agency estimating that over £100bn of illicit funds impact the UK each year, only a third (33%) of respondents feel that not enough is being done to fight the UK’s money laundering problem. Also of concern is that over half (57%) believe that the regulatory framework is effective in driving businesses to tackle the issue.

Jamie Cooke, Managing Director at fscom, told TFT:

“Simple steps can be taken to ensure businesses don’t fall foul of regulations. A regular review of the anti-money laundering controls and checks in place during a client onboarding process is an obvious starting point. It is always preferable to prevent the problem coming into the business than dealing with it later, hence the importance of strong onboarding measures.”

Are some sectors higher risk than others?

According to the report, the gaming sector and high value vendors (businesses who accept or make payments of over €10,000) were perceived to be the most appealing for criminals looking to launder money, (15% and 12% respectively). The legal sector (4%) and estate agents (6%), were perceived as being at the lowest risk. This is despite recent increased pressure and penalties from regulatory bodies such as HMRC and the Solicitors Regulation Authority (SRA) into their respective sectors. Almost three quarters of respondents (73%) also think that the regulations they have to comply with are proportionate for their sector, when compared with other non-regulated organisations.

Looking to the future, almost a quarter (24%) agreed that evolving criminal methodologies were the single biggest risk in the fight against dirty money in the UK over the next 12 months. This is compounded by the fact that 41% are concerned that there is a lack of understanding of the different ways in which criminals launder money within their own organisations. The impact of geopolitical events is also a concern, according to the report. Almost a fifth (18%) of respondents think events like Brexit will be the largest risk to fighting future financial crime; this is likely as a result of concerns around less information sharing.

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