“Professional services firms play a crucial role in combatting terrorist financing and money laundering, particularly in the property sector.
Tackling financial crime
UK banks, law firms, conveyancers, property management firms, and accountants are bound by the Anti Money Laundering (AML) Regulations, 2017, and Know Your Client (KYC) rules, and must follow the Financial Conduct Authority (FCA) guidance on preventing financial crime. This involves undertaking due diligence when accepting new customers, including requesting proof of identity. To combat property fraud, British conveyancers are required by law to undertake due diligence on property purchasers, using approved documentation to verify the identity, address, and source of funds of any prospective clients.
Online identity fraud increasing
Despite these efforts, the Cifas Fraudscape revealed that identity fraud increased by 23% between 2021 and 2022 and reached unprecedented levels. More than 277,000 identity fraud incidents were reported, representing, 68% of cases on the National Fraud Database. Cifas reported that 86% of identity fraud is now perpetrated through online channels and noted an increase in the use of synthetic identities and deep fake technology.
The burden on smaller firms
Undertaking paper-based AML and KYC processes is time-consuming, error-prone, and costly. The majority of firms in scope are micro businesses with fewer than ten employees, and compliance can place a heavy burden on resources. Yet they risk financial penalties of up to £25,000 from the Solicitors Regulation Authority (SRA) for failing to perform these checks.
Learning from experience
Having personally experienced the misery of identity fraud twenty years ago, when onboarding technology wasn’t available to smaller firms, I’ve made it my mission to help every business to benefit from using digital checks to combat financial crime and comply with KYC regulations. I founded software company, VirtualSignature-ID, which provides everything required to carry out identity checks, reduce the risk of fraud, and complete, electronically sign and witness documents, within a single platform.
SmartSign-Plus is a tool within that platform which eases the transition to using digital methods to conduct KYC, AML and background screening on prospective clients. This saves time, improves accuracy and supports business growth, while managing risk.
Government’s digital agenda
Owing to the government’s drive to use technology to assist with remote identity checks required for compliance with AML, KYC, Right to Work and Right to Rent, firms are under pressure to implement systems that will carry out these tasks securely, and provide an audit report that satisfies regulators, while still providing a good user experience.
Easing integration
However, from speaking to mid-sized professional firms, we know that new digital onboarding platforms are often incompatible with existing case management, document management, or practice management systems, resulting in disjointed workflows and requiring expensive software development. This is why SmartSign-Plus includes an API that smoothly integrates with commonly-used systems including iManage, Visualfiles, P4W, Intapp, Actionstep, Linetime, SOS and others, and ensures that every eSignature, document exchange and 3D liveness ID check has a date and time stamp and geo-location audit, to provide a digital record of compliance.
Government-approved software
VirtualSignature-ID earned Identity Service Provider (IDSP) status in November 2022, following a stringent audit process which certified that it conforms to the UK Digital Identity and Attributes Trust Framework, overseen by the Department for Innovation, Science and Technology. This means it provides professional service companies with the reassurance that when they are onboarding a new client, the background checks will be carried out using government-approved software and brings enterprise-level digital ID checking technology within reach of SMEs.
Improving digital defences
In response to the record increase in identity fraud, 86% of which is perpetrated on online channels, we decided to provide digital 3D liveness proof of identity software free of charge with the SmartSign-Plus Advanced eSignature application. The new software allows businesses in the legal, financial, accountancy and property sectors to verify the identity of both the signer and, where applicable, the witness, within seconds. Our goal is to help businesses of all sizes to more easily adopt digital identity verification so that they can ensure that prospective clients are who they say they are and help protect us all from financial crime online.”
