UK digital compliance provider SmartSearch has bolstered its platform to assist companies in quickly identifying potentially illicit money.
Regulated firms are recommended to verify the source of funds during client financial transactions as part of a risk-based approach. However, criminals involved in money laundering and those seeking to evade sanction restrictions often exploit this process to conceal their illicit gains.
Under the Proceeds of Crime Act, regulated firms must submit a Suspicious Activity Report (SAR) to the National Crime Agency (NCA) if they suspect someone is attempting to launder money acquired through criminal activities. The number of SARs submitted has doubled in the last five years, and the NCA has estimated that it will reach one million for the first time this year.
As part of its platform revamp, SmartSearch has developed its Source of Funds solution to help companies complete checks in only a minute.
Martin Cheek, managing director and qualified lawyer at SmartSearch, explained the complexities surrounding source of funds checks: “Source of funds checks are a problem area for regulated firms because the legal framework around them is still poorly understood. For example, it is often incorrectly assumed that funds transferred from a bank should be classed by default as clean money. That is not the case.
“Some also wrongly believe that they do not need to check a customer’s source of funds after their identity has been verified when, in fact, they do. These extra checks add to the increasing weight of compliance that many regulated firms are buckling under. Our development team has worked with our clients to develop this source of funds technology to help lighten that load.”
Through key partnerships, SmartSearch leverages open banking technology, enabling users to conduct source of funds, proof of funds, source of wealth, and source of income checks either as part of a broader search or as a standalone check. With minimal client input, the check is completed in just 60 seconds, while the ability to review bank transactions remains active for 90 days.
Cheek emphasised the pivotal role source of funds checks play in combating money laundering: “We provide businesses with a powerful tool that not only uncovers the true origin of funds but also disrupts the activities of criminals.”
The recently enhanced SmartSearch platform aligns with the company’s mission to furnish regulated firms with anti-money laundering (AML) compliance solutions.