Regulated firms battle surge in financial crime attempts, alarming new data finds

An alarming 42% of regulated firms are reporting a rise in financial crime attempts, while more than a quarter of firms say they have been a victim, new survey data commissioned by SmartSearch has revealed

At 48 percent, nearly half of legal professionals, solicitors and conveyancers reported a rise in financial crime attempts in 2023, compared to 34 percent the year prior. Estate agents and other property professionals reported the biggest increase in financial crime in 2023, jumping from 17 percent in 2022 to 37 percent in 2023.

Firms in the finance sector actually reported a decrease in financial crime (54% in 2022), yet 41 percent of firms still saw a rise in attempts. Slightly more accountancy firms (42%) made the same admission.

Meanwhile, the same survey found that more than a quarter (26%) of regulated firms fell victim to financial crime in the last six months – more than double the number (12%) in 2022. The number of property firms (29%) finding themselves prey to financial criminals increased almost five times since 2022, while finance firms falling victim to financial crime more than doubled to a third (14% in 2022).

As the threat level continues to rise, experts warn that regulated firms need to ensure they have the correct measures in place, and that their compliance checks are suitably robust.

All is revealed in a comprehensive new survey of over 500 decision-makers in regulated UK businesses across the legal, property, finance and accountancy sectors. The research was commissioned by SmartSearch, the UK’s leading provider of anti-money laundering (AML) and digital compliance solutions.

Martin Cheek, managing director of SmartSearch, and a qualified lawyer, said: “As the gatekeepers of the UK’s financial system, regulated firms in these sectors are on the frontline in the ongoing fight against financial crime. As attempts increase and more criminals look to exploit weaknesses to launder money and legitimise illicit funds, regulated firms must remain proactive and ensure their compliance processes are robust enough to withstand such attempts.

“For those firms that have already become a victim of money laundering or financial crime, I cannot think of a higher priority this year. As the threat level has risen, many firms have taken the opportunity to implement a digital compliance strategy, utilising the latest technology, along with real-time data to transform this onerous task into a seamless part of client onboarding and ongoing monitoring.”

As criminals continue to become more sophisticated, tools such as electronic verification (EV) and digital platforms such as SmartSearch have grown in popularity. In fact, EV is even recommended by the 2020 Money Laundering and Terrorist Financing Act as an important safeguard. Alongside EV for detailed identity checks, the SmartSearch platform combines robust sanction and PEP screening, individual and business searches and real-time intelligence from leading data sources.

The SmartSearch platform is trusted by more than 6,500 clients and 60,000 users. In addition to many of the world’s leading financial services firms and over 1,000 property firms, this includes one in two of the top 100 accountancy firms and one in three of the top 200 legal firms.

The research was conducted by Censuswide with a sample of 501 compliance decision-makers who take on new individual customers and new business clients. The survey fieldwork took place between September 11 and September 18, 2023. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council.