Compliance specialist SmartSearch claims 54% of identity checks are still manual.
The FinTech supplier says the Financial Ombudsman Service’s warning about the surge in online investment and employment scams – 31,300 complaints in 2025, with 20,000 involving authorised payments – exposes a fundamental vulnerability in how businesses verify who they’re dealing with.
Collette Smith of SmartSearch says that, behind every one of these scams is a moment when a financial institution, an investment platform, or an employment portal failed to properly verify identity.
“The criminal opened an account. They passed basic checks. They looked legitimate. And then they used that legitimacy to defraud victims.
“The question isn’t whether these platforms had verification processes. It’s whether those processes could catch what criminals are deploying in 2026: AI-generated identities, deepfake documents, and synthetic profiles that pass traditional checks without triggering any alarms.”
SmartSearch recently surveyed 1,000 key decision-makers across finance, property, legal, and accounting sectors.
Some 54% of identity verification checks are still conducted manually. Only 46% are digital.
“Manual processes can’t scale to catch the volume and sophistication of modern fraud. Visual inspection doesn’t detect pixel-level document forgery,” warns Smith.
“Static database checks don’t identify synthetic identities built from stolen data fragments. And checks performed once at onboarding miss the evolving risk signals that emerge over time.”
Smith adds that the Financial Ombudsman Service is right to urge consumers to pause, research, and verify before transferring money, but says the burden can’t rest solely on victims.
Smith says that this means they must do the following:
- Automated biometric verification to catch deepfakes and synthetic identities
- Real-time sanctions and PEP screening against global watchlists updated daily
- Multi-source identity triangulation to detect inconsistencies across data points
- Ongoing monitoring throughout the customer relationship, not just at onboarding
- Enhanced due diligence for high-risk profiles, including cryptocurrency-linked accounts
