In a survey of 500 decision-makers at firms in the finance and banking, property and legal sectors, a quarter said they still used manual checks with hard-copy documents such as passports and utility bills to verify the identities of new customers.
But many said that the process was time-consuming, in part because of slow response times. More than half of those who do manual checks said it could take from two days to a week. Another 12 per cent said it took them more than a week to check the documents.
Forged documents are becoming increasingly sophisticated, SmartSearch said, pointing to verification guidance from the Home Office which lists 24 points of potential failure, some of which would need expert knowledge to evaluate.
Only a third (33 per cent) of respondents in the SmartSearch electronic verification (EV) survey said they felt confident about being able to identify fake documents such as a utility bill, driving licence or passport.
‘Dirty money…washed through the UK economy’
Martin Cheek (pictured), managing director of SmartSearch, said the data showed “the inefficiency and unreliability of using manual processes to verify new customers.
“They also show that while regulated firms persist with these time-consuming, flawed processes, ‘dirty’ money will continue to be washed through the UK economy.”
SmartSearch, based in Ilkley, West Yorkshire, offers an anti-money-laundering (AML) software platform to verify people and companies.
“EV combines credit reference data with other reliable sources and is almost impossible to fake,” Cheek said. “The 2020 Money Laundering and Terrorist Finance Act even recommends that regulated firms use electronic verification as part of their due diligence to make it as effective as possible.”
The digital process, he added, “doesn’t just minimise the risk of breaching AML rules, it also makes the firms’ own customer journeys more efficient, helping those who use it to stand out from their competitors.”
