Around 73 per cent of regulated firms have not started verifying sources of clients’ funds using open banking, a report has found.
A survey by SmartSearch shows that one in five do not verify the source of funds at all, and over a quarter review bank statements manually. Almost a quarter say they use a combination of manual review and open banking services.
Around 70 per cent of accountants say they don’t use open banking for source of funds verification and 19 per cent don’t verify the source of funds at all.
Approximately 72 per cent of respondents in the property industry don’t use open banking for automatic verification and 20 per cent fail to verify the source of funds at all.
‘Surprise firms aren’t adopting open banking’
Fraser Mitchell, technical director of SmartSearch, said: “It’s surprising that regulated firms aren’t faster to adopt open banking, which would really speed up their compliance processes and help secure their business.
“Digital compliance platforms such as SmartSearch integrate source of funds checks, enabling firms to identify the origin of funds in just 60 seconds and with minimal input from the client. Rather than a complex, additional procedure, it becomes a standard part of client onboarding.”
Collette Allen, chief operating officer at SmartSearch, said: “It’s concerning that so many firms aren’t checking bank accounts even manually. This is a high-risk approach, which could potentially put some of them in contravention of UK anti-money laundering laws.”
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
