Regulated firms running gauntlet with hard copy identification

by | Aug 31, 2022

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Almost two thirds of regulated firms believe hard copy documents provide reassurance a customer is genuine, latest anti-money laundering data has revealed.

Despite questions of validity, nearly half of all firms questioned still use hard documents like passports, IDs and utility bills in some way to verify new business customers, despite more than 83% being aware of digital systems for electronic verification (EV).

The data also highlights the North East and the East of England as hotspots with more than 40% of firms relying on manual verification alone.

Meanwhile, the same number of regulated firms in the South East believe manual verification is the only way to truly guarantee a person’s ID.


All is revealed in a wide-spanning survey of 500 regulated businesses across the UK, conducted by leading anti-money laundering (AML) software specialists SmartSearch.

The survey covers businesses across legal, property, banking and finance sectors and forms part of SmartSearch’s Electronic Verification Uncovered campaign.

The shocking findings come as passports continue to be the most attacked form of identification. 2020 saw a 41% increase in ID fraud, generating losses of $712bn and fresh opportunities for money laundering and serious organised crime.


“With the number of fakes and forged documents rising – no doubt helped by criminals looking to circumvent growing sanctions, the latest data should sound alarm bells to businesses who wrongly believe hard copies are secure,” comments Martin Cheek (pictured), managing director of SmartSearch.

“This reliance on flawed manual checks is even more worrying as our data reveals many businesses aren’t confident enough to spot a fake. If there’s ever been a case for switching to a digital system and adopting electronic verification, now is certainly the time.”

Automated AML systems offer the certainty of EV, allowing users to complete thorough checks in just a matter of seconds. These can be completed as part of onboarding or while retro-screening existing customers, meeting the necessary Know Your Customer (KYC) requirements.


As global sanctions increase, a system like SmartSearch can even offer automatic monitoring and high-risk country reporting. This allows users to immediately identify both new and existing clients who are now subject to sanctions or even regarded as a politically exposed person (PEP).

“Going digital and improving compliance must move higher up the agenda for businesses, especially in the current climate,” Martin adds. “Even if it’s not for sake of efficiency but as regulators continue their crackdown and the number of hefty fines increase.”

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