fbpx

FCA green light for automation positive news for anti-money laundering

John Dobson

October 26, 2020

John Dobson SmartSearch

John Dobson (pictured) is chief executive of SmartSearch

Over the last few years automation has impacted virtually every industry sector.

The pandemic has already started to accelerate this shift and the property market has certainly seen more use of automated systems since the first lockdown started in March.

To cope with the current high demand driven by the stamp duty holiday, the mortgage market has made excellent progress in adopting these automated solutions with use of desktop valuations and automated valuation models (AVMs).

One area that has always been traditionally conducted face-to-face is onboarding new clients.

Despite the dangers this poses, some brokers are still reliant on face-to-face ‘manual’ processes for signing up new clients.

During the initial lockdown the Financial Conduct Authority (FCA) gave lenders the green light to use automated approaches to deal with borrowers, but it warned that it will be monitoring firms closely to ensure that these are appropriate.

Using hard copies of documents such as passports, bank statements or utility bills used to be seen as the gold standard for ID verification.

But with identity and financial fraud having risen exponentially, there are now much safer and more accurate ways of checking someone’s identity for anti-money laundering purposes.

Few, if any, people would be able to spot a fake passport or driving licence if it passed their desk as forgeries are now so convincing that even an expert can be deceived.

Meanwhile the requirement for face coverings to be worn at places of business clearly presents practical difficulties for identifications.

Fortunately, as the techniques employed by fraudsters have become more sophisticated, so too has the technology available to combat this.

It is now both possible and incredibly quick to conduct a full customer onboarding process – including all the necessary Know Your Customer (KYC) and Anti-Money-Laundering (AML) checks – completely remote and securely.

The latest technology can combine credit reference data, biometric facial recognition, and digital fraud checks.

By triple checking these different sources of information a unique ‘composite digital identity’ is produced that is virtually impossible to fake.

All this can be done online, with no need for in-person meetings, face coverings or hard copies of documents.

This automated approach is quicker, more convenient and more accurate.

Increasingly today’s first and second-time buyers also expect to be able to do almost everything online, or on their mobile.

There is therefore no longer a reason why this can’t extend to the process around buying and selling a home.

With the FCA giving the green light for an automated approach, brokers should all be adopting a quick and secure approach to AML and KYC checks to help with speed, accuracy and for the security of their own business.


Sign up to our daily email