Property purchases often trigger AML scrutiny

Nearly six in ten UK property transactions are now flagged for further scrutiny under anti-money laundering (AML) regulations, according to recent findings from Thirdfort, a client due diligence platform. A detailed analysis of over 415,000 completed Source of Funds (SoF) checks revealed that 57.7% of these transactions had at least one red flag, averaging two flags per report. This trend highlights the extensive compliance work now demanded from conveyancers and estate agents across the nation.

It's important to note that a red flag does not imply any wrongdoing on the part of the buyer or seller. However, it does signify the need for enhanced due diligence and additional supporting evidence before a transaction can be completed. In the absence of automation, follow-ups for these flagged transactions would generally involve labour-intensive manual tasks, requiring extra document requests and prolonged communication between professionals and clients.

Olly Thornton-Berry, co-founder and CEO at Thirdfort, emphasised the pressing nature of this issue by stating, “Our data shows that enhanced due diligence is now the norm rather than the exception in UK property transactions. When nearly six in ten purchases require additional checks, that represents a significant operational burden for conveyancers and estate agents, particularly those still relying on manual processes."

With traditional methods proving inadequate amidst the current challenges, technology is emerging as a vital asset for the property market. It effectively diminishes unnecessary communication delays and ensures that buyers provide relevant information from the outset, while simultaneously identifying potential risk indicators quickly and securely.

Thirdfort's overarching mission is to safeguard society against fraud and money laundering. The platform facilitates straightforward and secure client due diligence checks tailored for regulated professionals. This includes automated ID verification, AML monitoring, and Source of Funds checks for individuals and businesses involved in substantial financial transactions, such as purchasing property, preparing a will, or engaging a financial advisor.