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SmartSearch: Banks must change approach to AML

Jessica Bird

September 25, 2020

John Dobson SmartSearch

Following comments from the Financial Conduct Authority (FCA) that banks should implement better anti-money laundering (AML) controls, SmartSearch has suggested that institutions must rethink their approach.

John Dobson (pictured), CEO at SmartSearch, said: “The FCA is right when it says more needs to be done by the banks to combat money laundering and financial fraud.

“Although this has to go hand-in-hand with more prosecutions and stiffer penalties for those involved in this multi-billion pound industry.

“The fact is that banks need to work smarter and embrace the technology that is now available to every business on the high street.”

Part of this approach is about reducing the reliance on in-person ID verification, which has risen up the agenda following the impact of COVID-19 and the nationwide lockdown.

Dobson said: “[Banks] must accept that gone are the days when it was good enough for a customer to walk into a branch and present themselves and a document as proof if ID.

“Aside from the fact that nationwide branch closures make it more difficult for customers, the chances of a bank cashier identifying a fraudulent document is very low.

“It’s predominantly nothing more than a tick box exercise as is their ability to perform regular and comprehensive sanction and PEP (Politically Exposed Person) checks.

“It has been, and still is, a long way short of what’s required to spot fraud.

“As a result, the banks resorted to employing armies of back room staff performing manual tasks to process regulatory checks, which is not only laborious and expensive, but completely unnecessary.”

Advancements in technology have made this a thing of the past, Dobson continued: “Today, individual checks and business checks are now fully automated and take less than two seconds and two minutes respectively.

“Fully automated and auditable systems that are affordable for all businesses will remedy effectively almost all KYC-AML compliance checks, the cost of such systems start at less than £1,000 per annum and for large users the cost of all-inclusive solutions are less than £1 per customer onboarded.

“Is that really too much to ask for the banks to remain fully compliant? If the will is there the solutions definitely are.”


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