Almost one in five (18%) of property firms have seen a rise in criminals attempting to launder money or commit financial crime through their businesses in the last year, a new survey of 500 firms has revealed.
As well as this, more than one in 16 (6%) says it has been the victim of money laundering or financial crime in the past six months.
The findings sound a stark warning to regulated firms that organised criminals are increasingly active, and that the threat of financial crime is tangible.
In total, almost half (45%) of the regulated firms who took part in the survey had seen an increase in the number of attempts to commit crime through money laundering or financial crime.
Businesses in the East Midlands and Northern Ireland were the most likely to come under increased attacks from financial criminals – where 63% and 71% respectively of firms had seen a rise in illegal activity. But other regions were only slightly less vulnerable – up to or more than half of the regulated firms in Wales (56%), Yorkshire (53%) and the West Midlands (50%) also had to deal with increased attempts at money laundering and financial crime.
Meanwhile, even in areas where firms were apparently least likely to find themselves under increased attack – the North East (33%) and Scotland (37%) – the issue still affected more than a third of those surveyed.
The size of companies was also a factor in their likelihood of being targeted. Firms of more than 500 employees were almost twice as likely (55%) to see an increase in criminal activity compared to those with less than 50 people (28%).
The businesses were questioned during May by SmartSearch, whose MD Martin Cheek said:
“Governments can warn about financial crime, but these results show the reality of its threat. Not only is it very real, but the criminals behind it are increasingly active. These statistics should ring alarm bells for all regulated businesses – especially those which continue to rely on manual checks to onboard new individual customers and businesses.”
Despite the increased threat of financial crime, up to a quarter of the surveyed firms admitted that they still carried out manual checks on hard-copy documents such as passports and utility bills. A worrying 16% of them were unaware of digital ID and digital AML solutions, despite electronic solutions being recommended in the 2020 Money Laundering and Terrorist Finance Act.
Mr Cheek added:
“We know that organised crime gangs can easily make convincing forgeries of ID documents. Digital solutions remain the most effective way for regulated firms to remain compliant, as well as avoiding the fines and reputational damage which breaches of the regulations can bring.”
