‘Emerging finance’ firms falling victim to financial crime
More than a third of firms in ‘emerging finance’ sectors say they have been a victim of financial crime in the last six months.
A survey of 500 compliance decision-makers from property development firms, banks, crypto platforms and gaming firms also found that less than a quarter of these firms complete the necessary checks required by regulators to verify the identity of new individual customers.
The research, which was commissioned by digital compliance solutions provider SmartSearch, found that banks were the biggest victims, with more than 40 percent of all banks surveyed experiencing financial crime and/or money laundering.
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Challenger banks were slightly more impacted than high street banks, at 46 per cent versus 40 per cent.
And more than a third of property developers, a third of gaming firms and more than a quarter of crypto platforms all revealed they have a been a victim of financial crime in the last six months.
The survey’s findings follow the release of the Economic Crime Survey by the Home Office earlier this year, which found that the average annual cost for businesses for all fraud incidents has risen to more than £16,000. 11 per cent of businesses reported annual total costs of over £20,000, while three per cent reported costs in excess of £100,000.
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“There’s no question financial crime can have massive implications for businesses,” said Martin Cheek (pictured), managing director of SmartSearch.
“It’s not just the loss of revenue, it’s also the reputational damage and the questions it raises for regulators and authorities about the safeguards and compliance measures in place. That’s especially true if businesses are not properly verifying customers – as our survey has revealed.
“As the threat of money laundering and financial crime increases, and the burden of compliance grows even heavier, firms must take action and improve both their systems and their processes to avoid becoming victims too.”
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