Financial Crime attempts target high numbers of regulated firms

Some 42 per cent of regulated firms are reporting a rise in financial crime attempts, while more than a quarter say they have been a victim, new survey data can reveal.

At 48 per cent, nearly half of legal professionals, solicitors and conveyancers reported a rise in financial crime attempts in 2023, compared to 34 per cent the year prior. 

Estate agents and other property professionals reported the biggest increase in financial crime in 2023, jumping from 17  in 2022 to 37 per cent in 2023.

Firms in the finance sector actually reported a decrease in financial crime (54 per cent in 2022), yet 41 per cent of firms still saw a rise in attempts. 

Meanwhile, the same survey found that more than a quarter of regulated firms fell victim to financial crime in the last six months – more than double the number in 2022.

The number of property firms (29 per cent) finding themselves prey to financial criminals increased almost five times since 2022, while finance firms falling victim to financial crime more than doubled to a third (14 per cent in 2022).

As the threat level continues to rise, experts warn that regulated firms need to ensure they have the correct measures in place, and that their compliance checks are suitably robust.

The survey was of over 500 decision-makers in regulated UK businesses across the legal, property, finance and accountancy sectors commissioned by SmartSearch.

Managing director Martin Cheek says: “As the gatekeepers of the UK’s financial system, regulated firms in these sectors are on the frontline in the ongoing fight against financial crime.

“As attempts increase and more criminals look to exploit weaknesses to launder money and legitimise illicit funds, regulated firms must remain proactive and ensure their compliance processes are robust enough to withstand such attempts.

“For those firms that have already become a victim of money laundering or financial crime, I cannot think of a higher priority this year.

“As the threat level has risen, many firms have taken the opportunity to implement a digital compliance strategy, utilising the latest technology, along with real-time data to transform this onerous task into a seamless part of client onboarding and ongoing monitoring.”

As criminals continue to become more sophisticated, tools such as electronic verification and digital platforms have grown in popularity. EV is even recommended by the 2020 Money Laundering and Terrorist Financing Act as an important safeguard.