More than one in four business leaders admit they have no knowledge of recent changes to money laundering regulation and what they need to do to remain compliant, new research from SmartSearch has revealed.

The anti-money laundering (AML) specialist suggested 26% of business leaders are unaware of the changes, despite money laundering costing UK businesses, citizens and the Government upwards of £190bn each year – according to figures from the National Crime Agency.

In January this year, the Government introduced new AML regulations under the Fifth EU Money Laundering Directive (5MLD), which all UK businesses must comply with. The rules increased the importance on the acceptable use of electronic verification methods in confirming identity, without the need for passports or utility bills.

SmartSearch’s research, however, which quizzed a total 505 business leaders during April, found that just 28% are fully aware of the 5MLD regulations, with leaders in the public services and administration sectors found to be the least aware – over half (58%) suggested they did not know about the changes.

Furthermore, SmartSearch found that less than half (46%) of business leaders in the accounting, banking and finance sector had indicated they are fully aware of the updates.

SmartSearch CEO, John Dobson, commented: “The new regulations were put in place in order to help tackle rising levels of fraud and eliminate money laundering, which has been a huge concern among UK businesses.

“However, it is surprising to see so many business leaders and decision-makers ignoring vital changes to the money laundering regulations, which can have a huge impact on their business. It is also worrying that business leaders do not understand their own company’s exposure to potential financial crime.

“There is a clear knowledge gap here that needs to be filled. We hope that this research will go some way in helping make business leaders to become more aware of the regulation changes, and encourage them to put investment in their anti-money laundering compliance at the forefront of their business plans.”

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