Property firms must adopt a perpetual KYC model to meet rising fraud threat

Property firms need to make the switch to a perpetual Know Your Customer (pKYC) model to stay alive to the rising fraud threat and financial crime, a compliance expert has warned.

Zowie Lees-Howell

Zowie Lees-Howell, a data expert and vice president of enterprise sales at SmartSearch, the UK’s leading digital compliance provider, believes the current climate requires the property industry to modernise processes to maintain an accurate view and risk profile for each customer.

The calls come as firms continue to face increasing regulatory pressure and the prospect of significant fines for non-compliance. In addition to attempts by criminal gangs to launder illicit funds, the last year has seen Russian oligarchs and their contacts seek to evade the expanding sanction regime.

To mark one year since the Russian invasion, many western nations have introduced further restrictions, potentially pushing more new and existing customers into the spotlight and causing those firms without the necessary checks to unknowingly become enablers.

Widely regarded as the next iteration of Know Your Customer, pKYC replaces traditional manual checks at onboarding and passive periodic reviews. The process uses a wide range of data sources and technology to check and update client information in perpetuity, identifying potential red flags throughout the customer lifecycle.

To help firms in their adoption of pKYC, SmartSearch has just launched the next generation of its industry-leading digital compliance platform. This provides a holistic view of each search subject and a single source of truth to not only keep users up to date but make risk management more cost effective.

Zowie said:

“The growth of sanctions is a prime example of why a traditional KYC approach is no longer fit for purpose.

“Instead of working with a snapshot of a client, pKYC enables firms to build a complete picture, and one that constantly develops through hundreds of data sources to monitor for any changes in their status.

“This will be hugely reassuring for property firms as the threat level rises and clients both old and new potentially face new restrictions.

“By modernising processes, property firms and estate agents can also begin to see compliance as a competitive advantage.

“While firms automate their risk management and have confidence in the accuracy of its checks, customers benefit from a frictionless journey with digital onboarding and a reduced risk of false positives.

“There’s no question pKYC is a clear step forward in easing the compliance burden and we’re thrilled to support firms in their adoption through our next-generation platform.”

The enhanced platform continues a more than decade-long journey by SmartSearch to support regulated firms with their anti-money laundering (AML) compliance. Its digital compliance solution is trusted by more than 6,000 clients and 55,000 users. In addition to more than 2,000 financial services firms and over 1,000 property firms, this includes one in two of the top 100 accountancy firms and one in three of the top 200 legal firms.

Kindly shared by SmartSearch

Main article photograph courtesy of Pixabay