About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Regulated Firms that Don’t Trust Electronic Identification Verification Risk Financial Crime

Subscribe to our newsletter

More than 36% of people in regulated firms who ‘can’t trust’ electronic identity verification technology and instead rely on manual checks are leaving their doors open to financial crime, according to research by anti-money laundering specialist SmartSearch.

This statistic, from SmartSearch’s 2023 annual survey of 500 compliance stakeholders across financial, accountancy, property and legal services, has doubled since the company’s 2022 survey, when 18% percent of people said they couldn’t trust the technology.

Focusing on the financial services sector, the survey shows 40% of compliance stakeholders can’t trust electronic ID verification technology.

“This indicates a significant dip in trust in electronic ID verification technology, despite its recommendation as part of the due diligence process in the Money Laundering and Terrorist Finance Act 2020,” says Fraser Mitchell, technical director at SmartSearch. “Many regulated firms may be unaware of this advice, hence the mistrust. Meantime, criminal gangs are washing billions through the UK’s financial systems. It’s a real concern.”

Looking at manual methods of identification, 87% of survey respondents in regulated firms are naively confident that they could identify a fake document such as a passport, driving licence or utility bill. Looking at the financial sector, the research shows 95% of people believing they could manually spot a fake ID, despite forgery risks.

Nicola Gifford, general counsel at SmartSearch, comments: “This is our third Electronic Verification Uncovered campaign. Our objective is to address common misconceptions among regulated firms, with a view to lowering the barrier to businesses adopting electronic verification as standard practice.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: GenAI and LLM case studies for Surveillance, Screening and Scanning

As Generative AI (GenAI) and Large Language Models (LLMs) move from pilot to production, compliance, surveillance, and screening functions are seeing tangible results – and new risks. From trade surveillance to adverse media screening to policy and regulatory scanning, GenAI and LLMs promise to tackle complexity and volume at a scale never seen before. But...

BLOG

Reframing Corporate KYC: Encompass Targets Back-Book Exposure with Scalable EC Review

For many SME focussed banks, KYC investments have streamlined the onboarding journey but legacy KYC records – the back-book – often remain dormant until a regulatory inspection, or an enforcement case at a peer institution, forces a wholesale review. The challenge that follows is how to remediate at scale, with urgency, and without the need...

EVENT

RegTech Summit New York

Now in its 9th year, the RegTech Summit in New York will bring together the RegTech ecosystem to explore how the North American capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Regulatory Data Handbook 2021/2022 – Ninth Edition

Welcome to the ninth edition of A-Team Group’s Regulatory Data Handbook, a publication dedicated to helping you gain a full understanding of regulations related to your organisation from the details of requirements to best practice implementation. This edition of the handbook includes a focus on regulations being rolled out to bring order and standardisation to...