Research reveals a third of businesses believe they can spot a forged ID

Almost a third (28%) of regulated firms in the UK claim that analysing hard copies of documents is the most reliable method for identifying fraud - according to new research by leading RegTech firm SmartSearch.

These surprising results come from a survey* of 500 regulated businesses in the financial services, legal and property sectors. The research also found 28% of respondents were not aware of digital verification methods.

These statistics are particularly concerning as there has been a spike in fraudulent documents recently as criminals attempt to obscure their identity. SmartSearch’s research found almost half (48%) of respondents had reported a rise in financial crime attempts in the past 12 months.

Fraudulent documents have become even more sophisticated recently, and John Dobson, CEO of SmartSearch explained those relying on manual methods are leaving themselves dangerously exposed.

He commented: “Criminals are laundering millions of pounds in the UK, and they are using the most sophisticated methods possible to attempt to deceive.

“Therefore, it’s imperative that regulated businesses use all the technology available to them to fight against the growing wave of fraud.

“It takes an expert to even know the signs to look for in a fraudulent document, and those that are involved in money laundering are using state-of-the-art technology to create incredibly realistic forgeries. Unfortunately, those we surveyed that believe they can spot a fake, are sadly mistaken.

“It is encouraging that the majority polled stated they would struggle to spot a forged document, however the gaps need to be plugged.

“Switching to electronic verification is the smart thing to do. When it comes to preventing money laundering, it is the only real defense.”

With just a name and address, date of birth is optional, electronic verification combines credit reference data, biometric facial recognition, and digital fraud checks as well as electoral roll data and other reliable public sources to establish identity.

By triple checking these different sources of information a unique ‘composite digital identity’ is produced. This digital identity 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.

The findings from the survey are part of the SmartSearch Electronic Verification Uncovered campaign, which has launched following the unprecedented pressure on regulated businesses since the pandemic hit.

Due to the pandemic lockdowns carrying out processes such as Know Your Customer (KYC) checks, and due diligence required by anti-money laundering regulation, became increasingly difficult with the lack of face-to-face interactions.

Criminals looked to seize upon the lack of physical contact, using software to alter images of ID, and as a result, the Financial Conduct Authority endorsed the use of electronic verification.

With the UN estimating that £1.4 trillion is laundered globally every year, those looking to prevent money laundering should look to make the switch to electronic verification as soon as possible, to avoid falling foul of regulations.

For more information about anti-money laundering solutions in the UK, please visit www.smartsearch.com

Published: 10 November 2021