The importance of AML compliance in the UK regulated industries: perceptions and attitudes

Anti-Money Laundering (AML) compliance is a critical aspect of regulated industries such as legal, finance, and property sectors as it helps to prevent the illicit use of the sector for money laundering and other financial crimes. However, perceptions and attitudes toward AML compliance can vary within the industry.

According to a recent survey of five hundred regulated UK businesses, almost half admitted to not changing their approach to monitoring existing customers since Ukraine began, with 23% stating that they only monitored every 6 months or a year. In fact, 77% of the property firms who responded said they had either not changed the way they monitored existing clients at all.

While there may be some variations in perceptions and attitudes towards AML compliance within the regulated industries, the challenges for businesses to stay compliant cannot be understated, with the Financial Conduct Authority (FCA) only last week fined Santander over £100 million due to “serious and persistent gaps” in its AML processes showing that there were significant weaknesses in its AML systems.

In this article, we look at the different aspects of maintaining proper AML compliance exploring the challenges and solutions currently in the property, legal and finance sectors.

AML training to identify money laundering warning signs

Having the right AML compliance training is an important step in helping professionals in regulated industries identify and report potential money laundering activities. Money laundering involves disguising the proceeds of illegal activities as legitimate funds, and it can be difficult to spot without the proper knowledge and skills.

By providing training on how to spot money laundering warning signs, businesses and organisations can better protect themselves and the financial system from the harmful effects of these activities. This training can help professionals recognise unusual or suspicious behaviour, such as large or unusual transactions, and understand the steps they need to take to report it.

In addition to providing practical knowledge and skills, training can also help to raise awareness of the importance of AML compliance and the role that professionals play in preventing money laundering. This can help to create a culture of compliance within the industry and ensure that professionals are vigilant in spotting and reporting potential issues.

Implementing the right technology training is a critical component of AML compliance. Staff should be able to understand the use cases of AML compliance software and how it helps prevent fraud and other financial crime. By providing professionals with the knowledge and skills they need to spot and report suspicious activity, businesses and organisations can help to create a safer and more transparent financial system.

Verify 365 provides businesses with the solutions to be able to carry out enhanced due diligence in over 195 countries through the use of biometric identity verifications, automated address verifications, enhanced source of funds and source of wealth, PEPs/Sanctions and its KYB verifications. As part of the implementation of this technology, every organisation has policies, plans and procedures reviewed by an AML compliance expert.

“Regulated businesses such as those in the legal sector should be aware of the bigger picture. Implementation of AML policies, plans and procedures, as well as an appropriate AML technology solution is required to address these issues. We encourage all of our law firm clients to have a documented practice-wide risk assessment that can be evidenced as part of their overall policy. It’s not just about having a technology solution’ said CTO of Verify 365, Mev Dzihic.

“Our solution makes it easier to identify risk and know who you are dealing with. However, without the relevant training and full review of procedures, businesses will find it hard to evidence appropriate controls and procedures of AML when audited. Assisting businesses with this area is a big part of implementing our technology solution” added Mev.

For a free review of your current AML policies and training click here.

Operational challenges facing the property industry in maintaining AML compliance

Maintaining compliance with Anti-Money Laundering (AML) regulations can be a challenge for businesses and organisations in any industry. However, the property industry in particular faces several operational challenges in this regard.

One of the main challenges is the need to constantly monitor and verify the identities of customers. In the property industry, this includes homebuyers and sellers, as well as lenders, estate agents and other professionals involved in the transaction process. Ensuring that all parties are properly vetted and that there are no red flags or suspicious activity can be a time-consuming and resource-intensive process without the use of the right technology.

Methods of identity verification

Manual identity document checking

OCR Document validation

Biometric Identity Verification

Another challenge is the need to continuously monitor and report suspicious activity. This can relate to PEPS & Sanctions of an individual or business or monitoring unusual or large transactions, or transactions that seem out of character for the customer. This requires a robust system for tracking and reporting such activity, as well as the resources to do so.

The use of Open Banking digital bank statements can help provide a clear insight into the financial transactions that are being used for property transactions and can help provide the information necessary to highlight any suspicious activity.

Without using the right AML technology, it can be difficult for property professionals to find the time and resources to focus on AML compliance, potentially leading to shortcuts or oversights. Ensuring that customer identities are properly verified, suspicious activity is continuously monitored and reported, and the workload is manageable, all require careful planning and resources.

For a free review of your current ID verification software click here.

The fight against money laundering: the role of government bodies and professional AML companies

The fight against money laundering is a critical aspect of  preventing illicit activities on a wider scale. In this effort, the role of the regulators such as the Solicitors Regulation Authority, HMRC and technology providers such as Anti-Money Laundering (AML) company Verify 365 is crucial.

HMRC is the UK’s tax collection agency and is responsible for enforcing AML regulations and investigating financial crimes, including money laundering. The agency works to identify and disrupt money laundering activities, and can impose fines or other penalties on individuals or organisations that fail to comply with AML regulations.

AML technology providers such as Verify 365, provide specialised services to help businesses and organisations comply with AML regulations. These services may include training on how to spot and report suspicious activity, as well as assistance with implementing and maintaining AML controls.

Both HMRC and professional AML companies play a critical role in the fight against money laundering. HMRC helps to enforce AML regulations and take action against those who violate them, while professional AML companies provide expertise and support to help businesses and organizations comply with these regulations.

By working together, these entities can help to create a more transparent and regulated financial system, making it more difficult for money launderers and other financial criminals to operate.