SmartSearch has warned that UK businesses could be at risk of being “caught out” should the government decide to implement a winter lockdown.

Despite official denials of any plans for an October lockdown, the anti-money laundering (AML) expert warned that restrictions in October could cause disruption to business operations and create a potential opportunity for organised crime to exploit.

During the first full UK lockdown last year, SmartSearch found that many regulated businesses in the property, legal and financial services sectors were unable to carry out regulatory obligations such as ID checks and manual methods of verification – as this involved hard copy documents and face-to-face meetings.

SmartSearch CEO, John Dobson, said there is still a significant number of firms relying on processes which are not “COVID-safe” and they would be at risk in another lockdown.

“We all hope that the country is not plunged back into lockdown this winter, but if there is a possibility of it happening, business owners should be asking whether they are ready for it to avoid disruption to security and AML processes,” Dobson added.

“We carried out research among 500 regulated businesses in the UK this summer, which found more than a third (34%) across the financial services, legal and property sectors, still make manual checks when onboarding new customers.

“That is a significant number of firms that would be at risk in the event of a lockdown, not only in terms of business disruption, but opening up gaps in security that can be exploited by organised crime and fraudsters.”

Dobson also suggested that if firms switched to using electronic verification, all AML compliance could be done working from home, and outcomes shared with authorised colleagues wherever they are in the country.

“Another key benefit for remote working is that all the input and outcome data can be hosted centrally for a ‘watching brief’ oversight by the compliance senior management,” he added. “This also ensures perpetual Know Your Customer (KYC) checks as the system updates automatically once the data is inputted.

“It is an uncertain time especially going into winter, but it’s not too late to get that protection in place to give businesses confidence in the event of another lockdown.”

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