Why we cannot use 20th-century methods to fight 21st-Century crime in the new era of digital money

“In our latest blog series, AML expert Jade Kirk explores why we cannot use 20^th-century methods to fight 21^st - Century crime in the new era of digital money.”

We have known for a long time now that money laundering is a very serious problem – not only in itself but as an enabler for much more serious crime. Accordingly, when it comes to AML risks, money transfers have become much easier and faster, with people using online money transactions rather than traditional money transfer methods.

How can you have confidence that your transactions are safe when transferring money from anywhere in the world?

The NCA estimates that most of the proceeds of serious and organised crime – around £24billion a year – is laundered through UK banks and businesses. But due to the nature of the crime, it is almost impossible to put a number on the amount of money that is involved in money laundering, not to mention the real cost of money laundering via money transfers on our society and its victims.

Money laundering is not just about fraud, it is a much wider problem. And when people fail to put proper processes in place to stop it, they are, in effect, turning a blind eye, not just to money laundering, but to the harmful consequences it has on our society.

According to the Money Laundering Exposed report, London has become the money laundering capital of the world. Hidden behind closed doors, criminals are using the latest technology to exploit our financial institutions, property market and other sectors’ vulnerabilities in order to orchestrate serious crimes. They are not bound by data protection or national borders, so they can always stay one step ahead.

One of the main issues highlighted in the report is the increasingly sophisticated methods money launderers are using to clean their dirty cash. And it is for this reason that it is so important we play them at their own game.

We must use all the technology available to us – and continue to invest in regtech – in order to learn about these criminals and what they are doing so we can stop them in their tracks.

The 5th money laundering directive stipulates that electronic verification should be used wherever possible, and in light of this latest report, this has never been more important.

We cannot use 20th-century methods to fight 21st-century crime, so we urge the government to mandate that all KYC, PEP, and sanctions checks are electronic, as this will go a long way in the fight against the use of fraudulent documents, identity fraud, and money laundering.

SmartSearch provides a unique Anti Money Laundering (AML) verification platform delivering AML checks on Individuals and Businesses in both the UK and international markets.  

SmartSearch delivers the most efficient and cost-effective Anti Money Laundering (AML), Know Your Customer (KYC), and Customer Due Diligence (CDD) information, to ensure its clients remain compliant and protected.