Nearly two-thirds of regulated firms believe hard copy documents provide reassurance a customer is genuine, according to anti-money laundering research from SmartSearch.
Almost half of all firms questioned still use hard documents like passports, IDs and utility bills in some way to verify new business customers, despite more than 83% being aware of digital systems for electronic verification (EV).
The data also highlights the North East and the East of England as hotspots with more than 40% of firms relying on manual verification alone.
Meanwhile, the same number of regulated firms in the South East believe manual verification is the only way to truly guarantee a person’s ID.
Anti-money laundering (AML) software specialists SmartSearch’s survey of 500 regulated businesses across the UK covers businesses across legal, property, banking and finance sectors and forms part of SmartSearch’s Electronic Verification Uncovered campaign.
Passports continue to be the most attacked form of identification. 2020 saw a 41% increase in ID fraud, generating losses of $712bn and fresh opportunities for money laundering and serious organised crime.
Martin Cheek, managing director of SmartSearch, said: “With the number of fakes and forged documents rising – no doubt helped by criminals looking to circumvent growing sanctions, the latest data should sound alarm bells to businesses who wrongly believe hard copies are secure.
“This reliance on flawed manual checks is even more worrying as our data reveals many businesses aren’t confident enough to spot a fake. If there’s ever been a case for switching to a digital system and adopting electronic verification, now is certainly the time.
“Going digital and improving compliance must move higher up the agenda for businesses, especially in the current climate. Even if it’s not for sake of efficiency but as regulators continue their crackdown and the number of hefty fines increase.”
