Money laundering is an increasing issue in the UK property industry, as evidenced by the Pandora documents. Some realtors and estate agents risk assisting the laundering of dirty money by failing to adequately verify purchasers’ identities and comply with relevant AML Solutions.
To lessen the danger of money laundering, new AI, Open Banking, and face recognition technologies can automate and improve ID and AML procedures. However, realtors and other property professionals frequently confront three challenges to implementing such technologies.
So, in order to facilitate the adoption of appropriate technology, we have advised the government to take three critical actions. Firstly, the government’s approach to AML and technology should be more standardized. Secondly, it should provide an incentive for property experts to use the appropriate tools. Lastly, it should assist AML specialists in determining whether technology will perform the task to the appropriate standards.
We deal with over 500 law firms and several top estate agents, so we understand the challenges of implementing technology to combat economic crime.
The government and its regulators are inconsistent in their recommendations for enterprises to employ technology to combat money laundering. Some authorities, for example, provide explicit instructions on how organizations might use technology to undertake increased AML checks. Other anti-money laundering regulators, on the other hand, only mention the supporting role that technology may play. This causes confusion and reduces adoption rates.
Secondly, the government has failed to give a carrot to encourage property professionals to use AML systems. As a result, in the absence of a clear incentive, many realtors continue to use their old practices on the assumption that they are sufficient to prevent a regulatory violation.
Finally, while property professionals realize that technology may improve identification and AML checks, many are unaware of which companies do them to the appropriate regulatory quality. As a result, without a standardized approach to digital ID and AML verification, it is impossible for experts to assess whether solutions are enough to secure their organizations and clients.
Failure to eliminate these impediments to adopting the appropriate technology has various serious consequences.
Most crucially, the possibility of money laundering has grown in the UK housing sector. Last year, a joint study conducted by HM Treasury and Home Office concluded that the risk of money laundering in the real estate industry has gone up from medium to a high threshold. The increase was mostly due to an increase in “overseas purchasers and financial flows into the UK property market.” In the same research, the risk of an estate agency was raised from low to medium. The research identified flaws in the sector’s “anti-money laundering and counter-terrorist financing systems, limiting mitigations against the danger of money laundering.” As a result, without the necessary technologies, we face an increased danger of laundered money entering the UK housing market.
Furthermore, there are substantial consequences for realtors and estate agents who fail to meet their commitments. As of late, a steep rise has been witnessed in the amount of penalties on high-profile prospects.Such sanctions have the potential to drive some businesses out of business, damage their worldwide reputation, and hinder the future business.
The government must take three actions to encourage the use of appropriate instruments. To begin, we would want to see authorities unify their AML recommendations as much as possible in order to create a more uniform approach that fosters broader tech usage. Regulators should emphasize in their guidelines how digital ID providers help prevent fraud and improve customer confidence.
The HM Land Registry’s (HMLR) Digital ID Standard has teamed up with Safe Harbour in the deployment of suitable ID technology to aid realtors. As a result, HMLR’s strategy will assist in reducing fraud risk while also saving realtors and their clients considerable time and money. All regulators in charge of AML oversight should use a similar approach. The HM Land Registry’s (HMLR) Digital ID Standard has teamed up with Safe Harbour in the deployment of suitable ID technology to aid realtors
Lastly, the government needs to work in close collaboration with businesses in order to conduct robust AML checks on platforms and apps that require inspections. The government should publish a set of requirements that technology must meet, similar to what HMLR has done for the digital ID. All providers should be FCA-regulated, and they should employ Open Banking, AI, face biometrics, and cryptographic technologies to do AML checks. The government will assist property professionals in using the appropriate instruments to combat AML by taking these actions. As a result, it will assist to limit the danger of money laundering in the real estate market.
Anti-money laundering approaches give clear guidelines to battle the dangers like illegal tax avoidance. Associations that are AML compliant are thought of as safer as they rigorously cling to AML and counter-terrorism financing laws and guidelines.