Financial crime attempts surge among regulated firms

Despite a decrease in financial crime reports by finance sector firms, attempts have risen, emphasising the need for robust compliance measures. Experts stress the importance of implementing effective tools like electronic verification to combat the growing sophistication of financial criminals.

A recent survey has unveiled a troubling surge in financial crime attempts, with 42% of regulated firms reporting an increase, and more than a quarter falling victim to such illicit activities. The data, collected from over 500 decision-makers in the legal, property, finance, and accountancy sectors, paints a concerning picture of the escalating threat faced by regulated businesses.

Key findings from the survey include a notable rise in financial crime attempts among legal professionals, with 48% reporting an increase in 2023 compared to 34% the previous year. Estate agents and other property professionals experienced the most significant surge, jumping from 17% in 2022 to 37% in 2023. Surprisingly, the finance sector witnessed a decrease in reported financial crime (54% in 2022), yet 41% of firms still observed a rise in attempts. Accountancy firms reported a similar trend, with 42% admitting to an increase.

The survey also uncovered a significant rise in the number of regulated firms falling victim to financial crime in the last six months. The overall figure has more than doubled since 2022, reaching 26%. Property firms reported a nearly fivefold increase to 29%, while finance firms experiencing financial crime more than doubled to 14% from the previous year's 6%.

As the threat level continues to rise, experts emphasise the critical importance for regulated firms to have robust measures in place and ensure their compliance checks are suitably stringent. The survey, commissioned by SmartSearch, a leading provider of anti-money laundering and digital compliance solutions, highlights the pressing need for proactive measures against increasingly sophisticated financial criminals.

Martin Cheek, Managing Director of SmartSearch, emphasised the role of regulated firms as gatekeepers in the fight against financial crime. He stressed the necessity for these firms to remain proactive and enhance their compliance processes to withstand evolving threats. Cheek highlighted the adoption of digital compliance strategies, utilising tools like electronic verification (EV) to seamlessly integrate identity checks into client onboarding and ongoing monitoring.

The SmartSearch platform, combining robust sanction and PEP screening, individual and business searches, and real-time intelligence, is recommended as an important safeguard against financial crime. The platform is trusted by over 6,500 clients, including leading financial services firms, property firms, accountancy firms, and legal firms.

The survey, conducted by Censuswide, included 501 compliance decision-makers responsible for taking on new individual customers and new business clients. Fieldwork took place between September 11 and September 18, 2023, and adhered to the principles of the Market Research Society and membership of The British Polling Council.

Copyright & permissions