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Did you know that the amount of money laundered in the UK is estimated to be anywhere between £36bn–£90bn per year? That’s according to statistics from the National Crime Agency, with further figures showing that money laundering could be costing UK households up to £266 each, annually! And this is only going up.
Money laundering has been a prevalent problem for many sectors across the year. And with new technology and more advanced criminals emerging alongside it, it’s imperative that businesses are protecting themselves against money laundering—for the sake of their customers and the wider economy.
Despite this, we are still hearing of firms being penalised mind-blowing amounts for non-compliance with UK and international AML legislation, with the 2022-2023 Treasury Anti-Money Laundering Supervision Report finding 18% of firms were non-compliant in their AML reviews. But with Consumer Duty and other key regulatory changes being more heavily implemented over the past year, it’s now more important than ever to protect customers and their data, and to actively prevent AML. How? Our solution is with automated money laundering checks that do the work for you.
Here, we share five key anti-money laundering checks that will protect your firm, keep you compliant, and streamline your onboarding processes in 2025—it’s a win-win in our eyes!
1. Identity checks
Being able to verify who a potential customer or partner is, is not only crucial for maintaining compliance with the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017 and associated legislation, but also for ensuring customer due diligence—the process of checking your customers are who they say they are, and risk assessing your business.
With AML identity checks, you can efficiently and effectively validate client address and identity, giving you greater peace of mind over who you’re onboarding. These checks can involve screening via:
- UK electoral registers
- Credit file activity data
- Telephone directory
- Mortality or departure registers
- Birth index registers
- Sanctions
- Politically Exposed Persons (PEP) databases
And may involve:
- Adverse media screening
- Email and mobile device integrity
- Bank account verification
- Biometric validation
These can be implemented into your business’s existing AML checks, or as standalone checks, depending on your needs.
2. PEP and sanctions screening
Keeping your business and existing (and future!) customer base safe from bad actors should be a top priority for all firms. And dealing correctly with Politically Exposed Persons (PEP) and those who may have sanctions on them (now or in the future) are two key areas your firm should be prioritising when it comes to your AML processes.
- Politically Exposed Persons (PEP) are those who hold powerful, public functions and are therefore, more at risk of being bribed or corrupted by fraudsters to conduct financial crime.
- Sanctions can be imposed against people who have conducted, or been suspected to have conducted, financial crime. They can also be imposed against people who are anticipated to be high-risk for carrying out fraud.
When thinking about PEP and sanctions screening, it’s important to remember that these are not just things to check at the point of onboarding—they need to be monitored perpetually. And many AML checks online now do this for you!
3. Source and Proof of Funds checks
Being certain about the availability and legitimacy of client funds is crucial in managing risk and preventing money laundering and financial crime from being carried out. These checks typically involve having access to key customer bank account data to highlight not only the affordability of funds, but also the movement of the funds, so you can ensure your business is not dealing with laundered money.
Investing in source and proof of funds checks ensure:
- Greater peace of mind over legitimacy of funds
- Time and money are saved for your business
- Compliance is maintained
- Risk is reduced
By checking that the money coming into your business is legitimate, you ensure client due diligence—a key aspect of the AML guidelines and regulation.
4. Company reports
If your business plans include partnering with another company, you’ll need to apply the same strict AML process to their onboarding process, as you would to any other customer. Running company reports gives you greater insight into who you are doing business with, and helps to protect your firm and your customers against money laundering.
These reports typically involve carrying out credit checks against the company you’re working with, to ensure legitimacy of your potential business partners. As well as maintaining compliance with AML regulations, undertaking company reports means an extra layer of defence against financial and reputational loss. There are even automated international company reports which allow you to check the credit of overseas businesses before you partner with them.
5. Fraud score
Fraud remains a large problem within the financial services sector—with UK Finance’s Annual Fraud Report 2024 revealing that a significant £1.7bn was lost to fraud in 2023. With this level of financial crime still being successfully carried out, it’s important that your firm’s AML processes are robust, to manage and mitigate the risk of money laundering. And implementing fraud score checks into your automated AML checks can help with this.
These scores are generated using UK credit application data, electoral register details and adverse credit data. An analysis is then conducted to compare your client’s outcome data to thousands of other applicants, where they are then awarded a fraud score between 1–1000 depending on their perceived risk. Essentially, fraud scores give you the information needed to make an informed judgement on whether to onboard a client or business.
While nobody can say with certainty what’s to come in 2025, with regulatory bodies this year implementing much tighter controls for the protection of customers and prevention of money laundering, having a robust AML policy is crucial—and these five automated AML checks can help.
Need advice? We are experts in automated compliance solutions and can support you with anything from standalone checks to standard AML checks, and even batch screening. Get in touch with our friendly team to find out more, or to schedule in a free demo of any of our products.
Author
Richard Devine
Solutions Consultant
