Two thirds of regulated firms worry about an AML breach, SmartSearch says

The “worrying weight of compliance” is having an effect on regulated firms in the emerging financial sectors, with over two thirds saying that they are concerned about committing an anti-money laundering (AML) breach, a survey by SmartSearch has found.

The survey of 500 compliance decision-makers in banks, challenger banks, crypto platforms, property developers and gaming outlets, conducted by Censuswide, also found that 20% said they were “very worried” about the robustness of their compliance procedures.

In 2022, £6.4bn is estimated to have been laundered using cryptocurrency, while corruption watchdog Transparency International UK has calculated £6.7bn of suspicious funds has been invested in UK property since 2016.

Research also found casinos are the most anxious about their regulatory risks, with more than a third (34%) saying they were “very worried” about breaking the rules. Around one in five (18%) of crypto exchanges said they were similarly nervous about their compliance responsibilities.

Managing director at SmartSearch, Martin Cheek said: “As regulators fine and name and shame an increasing number of firms, the worrying weight of compliance is clearly a big concern for regulated companies, particularly those in the neo-financial sectors like cryptocurrency and challenger banking.”

However, despite their concerns, many firms also admit to a continuing reliance on flawed manual processes to verify customers. 40% said they verified new individual and business clients manually - wrongly believing that copies of official documents like passports or driving licences provided “reassurance” that customers were genuine. Official documents are easily forged by sophisticated criminals and, by not verifying them, firms are making themselves more vulnerable to the breaches they are worried about committing.

The survey is the third conducted by SmartSearch in its Electronic Verification Uncovered campaign, which aims to make regulated firms aware of the dangers of relying on flawed, old-fashioned methods of identify verification.

The campaign argues that regulated businesses should use digital compliance to ensure they properly identify and screen clients - as recommended by the Government in the 2020 Money Laundering and Terrorist Finance Act - to stem the flow of dirty money into the UK and protect firms from the fines and reputational damage which come with breaches.

SmartSearch has recently launched its next-generation platform which includes a new interface as well as a host of features and a new level of configurability. Its digital compliance solution supports more than 6,000 clients and 55,000 users across the world, helping them deploy millions of complex identity checks in seconds.

Cheek added: “What’s concerning about our survey is that it shows that a significant number of regulated firms have concerns about being vulnerable to an AML breach but aren’t doing anything to mitigate the risk - even though the regulators are becoming more likely to enforce the rules and crack down on breaches.

“Breaking the regulations unintentionally is not a defence. These firms should be investing in a digital compliance solution to protect themselves from the potentially eye-watering fines and considerable reputational damage which accompany a breach.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


NEW BUILD IN FOCUS - NEW EPISODE OF THE MORTGAGE INSIDER PODCAST, OUT NOW
Figures from the National House-Building Council saw Q1 2025 register a 36% increase in new homes built across the UK compared with the same period last year, representing a striking development for the first-time buyer market. But with the higher cost of building, ongoing planning challenges and new and changing regulations, how sustainable is this growth? And what does it mean for brokers?

The role of the bridging market and technology usage in the industry
Content editor, Dan McGrath, sat down with chief operating officer at Black & White Bridging, Damien Druce, and head of development finance at Empire Global Finance, Pete Williams, to explore the role of the bridging sector, the role of AI across the industry and how the property market has fared in the Labour Government’s first year in office.

Does the North-South divide still exist in the UK housing market?
What do the most expensive parts of the country reveal about shifting demand? And why is the Manchester housing market now outperforming many southern counterparts?



In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance, to explore how regional trends are redefining the UK housing, mortgage and buy-to-let markets.

The new episode of The Mortgage Insider podcast, out now
Regional housing markets now matter more than ever. While London and the Southeast still tend to dominate the headlines from a house price and affordability perspective, much of the growth in rental yields and buyer demand is coming from other parts of the UK.

In this episode of the Barclays Mortgage Insider Podcast, host Phil Spencer is joined by Lucian Cook, Head of Research at Savills, and Ross Jones, founder of Home Financial and Evolve Commercial Finance.