Money laundering is on the rise, with regulated firms seeing suspicious activity more frequently, new research has found.
500 compliance decision-makers were surveyed from the realms of property development, crypto, banking – including challenger banks – and gaming.
More than a third of respondents (36 per cent) reported a rise in the number of Suspicious Activity Reports (SARs) they have submitted over the past six months.
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The Proceeds of Crime Act requires regulated firms to submit an SAR to the National Crime Agency (NCA) if they believe that someone is trying to clean dirty money earned from the proceeds of crime. The number of SARs submitted has doubled in the last five years and the NCA has estimated that it will hit a million for the first time this year.
The survey – commissioned by anti-money laundering software provider SmartSearch – also found that many firms rely on manual checks to verify customers. 40 per cent said they verified new individual and business clients manually, wrongly believing that taking copies of official documents like passports or driving licences provided reassurance that customers were genuine.
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“These figures are concerning because they show that there is no abatement in criminal attempts to wash dirty money through the UK economy,” said SmartSearch managing director Martin Cheek.
“Far from it – suspicious activity is clearly increasing.
“But that concern is compounded by the number of firms who also admit to a continued reliance on manual checks to onboard new customers. If these sectors are seeing a rise in suspicious activity, then their customer verification and anti-money laundering procedures should be as robust as possible. But our survey shows that they are not.”
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The survey showed that high street betting shops are the most likely to have to deal with dirty money, with almost two thirds saying that they had submitted a higher number of SARs. Challenger banks were also targeted, with nearly half reporting an increase.
A Financial Conduct Authority review last year raised concerns over the adequacy of challenger banks’ defences against financial crimes.
