Less than half of regulated firms (46%) often complete verification checks, while almost a quarter (21%) of regulated firms only sometimes complete verification checks, either manually or electronically.

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Without proper identity checks of all customers — a requirement of regulated firms within the UK — compliance experts warn that organisations are leaving themselves exposed to financial crime, regulatory action, and reputational damage. 

Despite the clear mandate for conveyancers and estate agents to complete identity checks on property buyers, three quarters (75%) of property firms and 7 in 10 legal firms admitted that they do not always complete such checks. 

Of all the sectors surveyed, accountancy firms are most likely to ask for proof of identity or run a check, but still only 32% of firms responded always. 

Martin Cheek, managing director at SmartSearch (pictured above), said: “When a regulated firm is asked how often they verify the identity of customers, the answer should be always.

“Not only is it a clear regulatory requirement to complete such checks, but it is also critical in protecting the business from financial crime.

“Rather than a worrying reduction in checks, regulated firms should be increasing checks in line with the rising threat level.

“Just as important is the shift to electronic verification (EV) as criminals continue to find new ways to falsify official identity documents.

“Rather than flawed and time-consuming manual processes, EV presents a robust, efficient and cost-effective way to screen both new and existing clients — all while avoiding intervention from regulators.”