Lessons learned from Santander - How to avoid AML fines using SmartDoc

Money laundering is not only a crime itself, but it also underpins and enables most forms of organised crime, yet, despite the huge threat it poses – and the estimated £100bn a year cost to the UK economy – many businesses in the UK are not taking their obligations seriously.

Firms that fail to put proper AML processes in place are not only leaving themselves vulnerable to money laundering, but also at risk of multi-million-pound fines for non-compliance.

FCA fined Santander £108m for gaps in compliance processes

In December 2022, the Financial Conduct Authority (FCA) fined Santander £108m for ‘serious and persistent gaps’ in its money laundering controls.

According to the FCA’s investigation, Santander ‘failed to properly monitor’ the money their customers told them was going through their accounts compared with what was actually being deposited.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said that the ‘poor management’ of their anti-money laundering systems and their ‘inadequate attempts to address the problems’ had created a ‘prolonged and severe risk of money laundering and financial crime’.

He added: “As part of our commitment to prevent and reduce financial crime we continue to take action against firms which fail to operate proper anti-money laundering controls.” 

Sarah Harrigan, Account Director at AML experts SmartSearch says that the Santander case should act as a warning to firms that AML failures are costly in more ways than one:

“The FCA is really clamping down on firms that fail to meet their AML obligations, and as we can see from the Santander fine – and the £265m fine against NatWest last march for enabling £365 million to be ‘washed’ by a single customer - the financial penalties can be huge, not to mention the losses incurred as a result of the money laundering itself, and the long term damage to a firm’s reputation after being involved in a money laundering scandal.

“While some firms are negligent -  knowingly failing to put proper AML controls in place - the vast majority do have AML programmes, but they are just not fit for purpose – either because they are out of date, or rely on manual processes.”

Why is electronic verification so much better than paper-based?

More than a third (34%) of regulated firms in the UK still rely on manual – also known as paper based – checks, meaning they are using physical documents like driving licenses and passports as way of verifying someone’s ID.  These outdated methods are not only time consuming and expensive, but more open to human error – fraudulent documents are now so convincing that it is impossible to spot fakes through manual checks alone - leaving firms at an increased risk of being compromised by fraudulent ID documents.

Sarah Harrigan, Account Director continues: “SimplyBiz members do not need to rely on manual checks because they have access to SmartDoc – our convenient and cost-effective document check solution that can verify passports, driving licences, work permits and Visas.

“By combining document authentication technology and the latest biometric verification and liveness detection techniques, SmartDoc removes the need for face-to-face interaction making customer checks quick, affordable and reliable.

SmartDoc

The SmartDoc technology confirms whether a document is genuine and unaltered, and also, that it belongs to the person presenting it, providing an additional layer of security to identity checks. It then provides a pass-fail result and also screens the customer against politically exposed persons (PEP) and sanctions lists, and fraud databases.

Sarah Harrigan, Account Director concludes: “As a SimplyBiz member, not only do you already have access to our SmartDoc technology, but you also benefit from exclusive discounts and preferential rates. To take advantage of this and to enhance your compliance processes contact our partnerships team today.”

If you’re ready to simplify your verification process, register today by clicking on the link below https://www.smartsearchsecure.com/register/simplybiz

Or, for additional information, please contact our dedicated partnerships team at partnerships@smartsearch.com or call 0113 487 1717.