Two fifths of regulated firms are reporting a rise in financial crime attempts, while more than a quarter admit to being victims, according to a recent survey by SmartSearch, a UK provider of anti-money-laundering software.
Conducted among 501 compliance decision-makers, the survey underscores the urgency for regulated firms to fortify their defences against increasingly sophisticated financial criminals.
The data reveals significant increases in financial crime across various sectors, with legal and property firms experiencing notable spikes. Twenty-six per cent of regulated firms fell victim to financial crime in the last six months – more than double the number (12 per cent) in 2022.
Nearly half of legal professionals, solicitors and conveyancers reported a rise in financial crime attempts in 2023, compared to 34 per cent the previous year. Estate agents and other property professionals reported the biggest increase in financial crime in 2023, rising from 17 per cent in 2022 to 37 per cent in 2023.
Despite a decrease in the finance sector, challenges persist, with 41 per cent of firms still facing heightened attempts.
Martin Cheek, managing director of SmartSearch, comments: “As the gatekeepers of the UK’s financial system, regulated firms in these sectors are on the frontline in the ongoing fight against financial crime. As attempts increase and more criminals look to exploit weaknesses to launder money and legitimise illicit funds, regulated firms must remain proactive and ensure their compliance processes are robust enough to withstand such attempts.
“For those firms that have already become a victim of money laundering or financial crime, I cannot think of a higher priority this year. As the threat level has risen, many firms have taken the opportunity to implement a digital compliance strategy, utilising the latest technology, along with real-time data to transform this onerous task into a seamless part of client onboarding and ongoing monitoring.”
Taking action
As the threat level continues to rise, experts warn that regulated firms need to ensure they have the correct measures in place, and that their compliance checks are suitably robust.
Tools such as electronic verification (EV) are growing in popularity, says SmartSearch, yet 52 per cent of regulated firms still rely on manual processes, while two-thirds regularly leave themselves open to risk because they do not ‘always’ run proper checks on new customers.
Alongside EV for detailed identity checks, SmartSearch’s platform combines sanction and PEP screening, individual and business searches and real-time intelligence from major data sources.
