"In January EU-wide money laundering directives were published and still need to be adhered to in the UK."
In January EU-wide money laundering directives were published and still need to be adhered to in the UK. In addition, as part of the legislation governing the departure from the trading bloc, the UK government has stipulated that electronic verification should be used when verifying identity as part of the onboarding process for new customers. This key amendment in the legislation enables businesses to move away from manual, document-based checks.
The Sixth Money Laundering Directive (6MLD) will increase the sentence for money laundering crimes to a minimum of four years imprisonment when it comes into effect on 3rd June. The 6MLD will also add “aiding and abetting” to the list of activities that are categorised as money laundering.
Therefore, it is now crucial that regulated businesses are compliant. And switching to electronic verification is the best way for regulated businesses to ensure compliance with all the latest legislation, in the UK and EU.
The most secure way to onboard new customers is by using a digital platform, and we urge all businesses to make the switch to electronic verification as soon as possible.
For some time now it’s been clear that documents are dead. Few, if any, people would be able to spot a fake passport or driving licence if it passed their desk as forgeries are now so convincing that even an expert can be deceived. This becomes even more difficult when looking at a digital copy. Photo-editing software is readily available and even those with rudimentary skills can easily alter documents convincingly.
Whereas electronic verification is an alternative which is quicker and more cost effective. It’s also less intrusive for you and your client, as well as being 100% Covid-secure because you don’t need to meet face-to-face. Faced with this current wave of coronavirus, regulated businesses need to act fast to make the switch to electronic verification. Even once the lockdowns end, there looks set to be a shift in how we interact and remote communications look set to stay.
Those regulated businesses that are still relying on physical methods could find themselves seriously exposed at best, or in breach of anti-money laundering regulations at worst. Therefore, switching to an electronic system which makes the customer onboarding process incredibly fast should be a priority. These electronic checks will include all the necessary Know Your Customer (KYC) and Anti-Money-Laundering (AML) checks and can be conducted completely remote and securely.
The latest technology can combine credit reference data, biometric facial recognition, and digital fraud checks. At SmartSearch we incorporate CRA (credit reference agency) data, electoral roll data and other reliable public data sources to establish identity. By triple checking these different sources of information a unique ‘composite digital identity’ is produced that is virtually impossible to fake. All this can be done online, with no need for in-person meetings, face coverings or hard copies of documents.
This automated approach is quicker, more convenient and more accurate. With HMRC recently sending a reminder to regulated businesses about their responsibility with a record fine of £24million to a money-transfer services, now is the time that regulated businesses should be adopting a quick and secure approach to AML and KYC checks.
Regulated businesses can be up and running with a full one-stop-shop electronic AML platform that partners with the world’s best data suppliers in 24 hours. This will deliver completely reliable ID verification with automatic global sanctions and PEP screening with ongoing monitoring in a matter of seconds, ensuring you remain AML compliant at all times.
