A survey has revealed that almost half (43%) of property professionals are not improving their anti-money laundering (AML) processes because they either don’t care or don’t think they will get fined.
The survey from First AML, anti-money laundering tech scaleup, asked 250 real estate professionals across the UK on their AML processes. The research found that nearly half (48%) have identified an instance of suspected money laundering in the past three years. Alongside this, 59% of respondents are not completely confident in their AML procedures.
Britain has been named a “global hub for money laundering” with new figures revealing that property worth £1.5billion has been bought by Russians with Kremlin links or facing corruption allegations. Despite this, First AML’s survey revealed that over a third (36%) of real estate professionals haven’t reviewed the sanction list in the last month.
These findings correspond with previous data which found that 47% of regulated firms in the legal, property and finance and banking sectors admitted to not changing their approach to monitoring existing customers since Russia had invaded Ukraine – mainly because they either trusted their clients or had worked with them for a long time.
Despite the growing threat and previous warnings over AML breaches, 42% of respondents in this survey said they are considering cutting their compliance budget in light of the expected recession. However, this is unsurprising when the survey found that maximising profitability was ranked as the highest business priority, while protecting their reputation was identified as the lowest priority.
Simon Luke, UK Country Manager at First AML, commented:
“Property professionals need to be more vigilant when it comes to their anti-money laundering processes. Turning a blind eye because they believe the severity of fines is small or inconsequential is a very dangerous mindset. It’s time for the real estate sector to ensure they have a robust process in place in order to prevent dirty money from passing through their systems.”
When asked what they believed was the weakest part of their AML process, the majority of property professionals surveyed said training staff on the latest regulations (29%). This was closely followed by document collection for individuals and companies (24%) and getting staff to actually follow procedures (23%).
To become more compliant, 78% claim to be implementing technology. In addition to this, 60% were found to be looking to increase budgets for emerging tech and implement AML software in 2023 to avoid AML non-compliance fines.
Luke added:
“The sector needs to reassess its priorities. And that means implementing innovative technology solutions that can not only reduce costs and the administrative burden of compliance, but also ensure businesses are doing the right thing,”
On a positive note, 82% of real estate professionals say money laundering has become a greater focus in 2022, with the majority saying this is because of an increased focus on customer transparency and ethical customer onboarding (60%).
