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: Best Practices for Managing Trade Surveillance

The surge in trading volumes combined with the emergence of new digital financial assets and geopolitical events have added layers of complexity to market activities. Traditional surveillance methods often struggle to keep pace with these changes, leading to difficulties in detecting sophisticated market abuses and increased regulatory risk. To address these challenges, financial institutions are...

BLOG

What an Actimize Sale Might Mean for Surveillance and FinCrime Technology

When news emerged that NICE is preparing to sell its Actimize division – long regarded as one of the most established full-stack platforms for financial crime, fraud, and surveillance – the immediate headlines focused on valuation. With reports suggesting a price in the range of US$1.5–2 billion, the deal would be one of the RegTech...

EVENT

Buy AND Build: The Future of Capital Markets Technology

Buy AND Build: The Future of Capital Markets Technology London examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

The DORA Implementation Playbook: A Practitioner’s Guide to Demonstrating Resilience Beyond the Deadline

The Digital Operational Resilience Act (DORA) has fundamentally reshaped the European Union’s financial regulatory landscape, with its full application beginning on January 17, 2025. This regulation goes beyond traditional risk management, explicitly acknowledging that digital incidents can threaten the stability of the entire financial system. As the deadline has passed, the focus is now shifting...