According to new data from SmartSearch, almost half of firms in the financial services in the UK have reported increasing levels of financial crime over the past year.
The RegTech firm surveyed 500 UK regulated businesses in the financial services, legal and property sectors.
Overall, 48% of respondents stated they saw a rise in financial crime, with 26% admitting that they had been a victim themselves to these attacks.
Legal firms, including conveyancers, experienced the most significant number of compromises, with a third stating they had been a victim of financial crime.
There were also significant variations across the regions of the UK with 64% of regulated businesses in the East Midlands reporting a rise in fraud attempts, and 55% in London.
SmartSearch chief executive John Dobson says: “There’s no doubt the conditions since the outbreak of Coronavirus have been ripe for criminals to seize the opportunity for money laundering and other fraudulent activities in the property market.”
In particular, crucial Know Your Customr (KYC) checks and other due diligence processes required by AML regulations became more difficult as face-to-face meetings were banned.
In September, the Money Laundering and Terrorist Finance Act was introduced and allowed busineses to streamline these due diligence processess, via digital verification. However, the survey revealed that 13% of firms were not aware of the change.
“In September 2020 the Money Laundering and Terrorist Finance Act recommended the switch to electronic verification, so it’s a concern that more than one in ten firms are still not aware of it.
“It is a key development in the anti-money laundering sector as a digital platform ensures your business is 100% compliant with Financial Conduct Authority regulations at all times.
“This avoids the potential for punitive fines or even criminal proceedings for non-compliance if your firm is found to be in breach.”