More than a third of firms in emerging finance sectors have been a victim of financial crime, including money laundering, in the last six months, new data from a cross-sector survey led by SmartSearch has found.

Five hundred compliance decision-makers in banks, challenger banks, crypto platforms, property developers and gaming outlets were surveyed by the provider of digital compliance solutions.

The research also found that less than a quarter of firms complete the necessary checks, required by regulators to verify the identity of new individual customers.

The survey, which is the third in SmartSearch’s electronic verification uncovered campaign, follows the economic crime survey earlier this year, which found that the average annual cost for businesses for all fraud incidents has escalated to me than £16,000.

At the same time, 11% of businesses reported annual costs of over £20,000, with 3% reporting costs in excess of £100,000.

The SmartSearch data found that banks were the biggest victim, with over 40% of all banks surveyed falling foul To financial crime or money laundering. Within banking, the number of challenger banks slightly edged out the traditional high-street banks in making the admission, with 46% and 40% reporting these instances respectively.

Across other sectors, more than a third of property developers, a third of gaming firms and more than a quarter of crypto platforms all revealed that they have been a victim of financial crime in the last six months.

Managing director of SmartSearch, Martin Cheek, 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.”

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