The Surge of Financial Crime in Legal and Property Sectors: A Closer Look at SmartSearch Data

A recent survey conducted by SmartSearch, a reputable UK-based provider of anti-money-laundering software, has unveiled concerning statistics regarding the rise in financial crime attempts within regulated firms. The survey, which engaged 501 compliance decision-makers, revealed that a significant 40% of regulated firms are reporting an increase in financial crime attempts, with over a quarter admitting to falling victim to such criminal activities. This data emphasizes the urgent need for regulated firms to enhance their defences against the escalating sophistication of financial criminals.

The survey uncovered notable spikes in financial crime across various sectors, particularly within legal and property firms. A striking 26% of regulated firms reported being victims of financial crime within the last six months, representing a considerable increase from the 12% recorded in 2022. Legal professionals, including solicitors and conveyancers, also reported a surge in financial crime attempts, with nearly half experiencing such incidents in 2023 compared to 34% in the previous year. Similarly, estate agents and other property professionals saw a substantial increase in financial crime, rising from 17% in 2022 to 37% in 2023.

Despite a decrease in financial crime within the finance sector, challenges persist, with 41% of firms still facing heightened attempts. Martin Cheek, the esteemed managing director of SmartSearch, emphasized the pivotal role of regulated firms as the “gatekeepers” of the UK’s financial system and urged them to remain proactive in fortifying their compliance processes to withstand such attempts.

In response to the escalating threat level, experts have advised regulated firms to ensure the implementation of appropriate measures and robust compliance checks. SmartSearch highlighted the increasing adoption of electronic verification (EV) for detailed identity checks, noting that 52% of regulated firms still rely on manual processes and two-thirds risk leaving themselves vulnerable by not ‘always’ conducting proper checks on new customers. SmartSearch’s platform, which integrates sanction and PEP screening, individual and business searches, and real-time intelligence from major data sources, offers a comprehensive solution for combating financial crime.

In conclusion, the findings from SmartSearch’s survey underscore the growing threat of financial crime within the legal and property sectors. Regulated firms are urged to proactively implement digital compliance strategies and leverage the latest technology to fortify their defences. Prioritising the robustness of compliance processes is crucial for effectively combatting the increasingly sophisticated tactics employed by financial criminals.