Over one-third of firms in emerging finance sectors admit that they have been a victim of financial crime – including money laundering, in the last six months, according to new research from SmartSearch.
The survey also found that less than a quarter of firms complete the necessary checks, required by regulators to verify the identity of new individual customers.
SmartSearch surveyed 500 compliance decision-makers in banks, challenger banks, crypto platforms, property developers and gaming outlets.
It follows the Economic Crime Survey earlier this year, which found that the average annual cost for businesses for all fraud incidents has escalated to more than £16,000. Meanwhile, 11% of businesses reported annual total costs of over £20,000, while three percent reported costs in excess of £100,000.
The SmartSearch data found that banks were the biggest victims, with more than 40% of all banks surveyed falling foul of financial crime and/or money laundering. Within banking, the number of challenger banks (46%) slightly edged out traditional high-street banks (40%) in making the admission.
Across the other sectors surveyed, more than a third of property developers, a third of gaming firms and more than a quarter of crypto platforms all revealed they have a been a victim of financial crime in the last six months.
Martin Cheek (pictured), managing director of SmartSearch, said: “There’s no question financial crime can have massive implications for businesses. It’s not just the loss of revenue, it’s also the reputational damage and the questions it raises for regulators and authorities about the safeguards and compliance measures in place. That’s especially true if businesses are not properly verifying customers – as our survey has revealed.
“As the threat of money laundering and financial crime increases, and the burden of compliance grows even heavier, firms must take action and improve both their systems and their processes to avoid becoming victims too. Advancements in digital compliance are helping firms of all sizes mitigate these challenges by not only identifying potential red flags as part of detailed checks, but providing constant access to real-time data and intelligence.”