Any businesses involved with property transactions, including estate agents and letting agents, are required to ensure customer verification and to thoroughly assess any potential financial crime risks before completing any deals.
One issue many businesses are finding with this is that the traditional methods of verification, including checking passports, licences, and utility bills, etc, are coming up against the growing complexity of financial crime.
Due to this, digital identity verification technology is taking on an increasingly important role in helping to Know Your Customer, or KYC, for estate agents.
With the property sector identified as a target for money laundering activities, due to large sums of money exchanging hands, international investment, and often complex ownership structures, regulators have responded with stronger AML regulations and increased enforcement.
This means that those working in the property market must now implement comprehensive customer due diligence processes. This includes verifying identities, understanding the source of the funds fully, and identifying potential sanctions or politically exposed person risks.
These requirements have meant an increase in admin tasks for property professionals, which can often take up a lot of time and effort, as well as making compliance processes more complex.
Identity checks used to rely heavily on a very manual process to validate documents, which brought about their own challenges.
Documents would be requested and checked by eye in order to confirm authenticity or, indeed, any signs of fraud. This can be quite an undertaking, especially in an already busy industry, and although the approach can be effective in many cases, it also presents various challenges.
These checks would not always be sufficient and would take up a lot of time, often being inconsistent, in particular when dealing with many customers at once. Not to mention, these types of checks brought about a high risk of human error when attempting to identify signs of a stolen identity, for example, by eye.
Digital identity verification technologies are starting to transform how property sector businesses conduct their KYC (Know Your Customer) checks.
The use of digital systems combines the use of biometric verification (fingerprint or facial recognition identification), database checks, and document authentication tools to confirm customer identities.
This electronic ID verification in the property sector processing of customers can help to verify identities remotely, via smartphones or computers, meaning agents can complete compliance checks quickly and securely, and not to mention with a thorough understanding of the customer in question, assuring their KYC processes are secure and in a good place.
By opting for these more automated solutions, it’s possible to compare identity documents against a variety of trusted databases and to analyse biometric data (like facial recognition) to confirm that the person presenting the document is the legal owner.
By estate agents adopting digital identity verification, there are several advantages to be gained from this. The first one is that it significantly speeds up customer onboarding. In the past, identity checks could take days, but now, they can be completed within a matter of minutes.
Secondly, many who work in the property sector have found that digital verification processes actually help to improve accuracy and reduce the risk of human error, as these automated systems can detect signs of fraudulent documents that may be difficult for humans to identify.
The third advantage to be gained from using digital platforms is that you can create secure audit trails that can help you demonstrate compliance, should you need to, with regulatory officials. These records can be invaluable during any compliance inspections or reviews that may need to take place.
Being able to verify identities is just one part of the AML process, but to fully manage financial crime risks, those within the property industry must also screen customers against sanctions lists, databases for politically exposed persons, and adverse media sources.
These types of platforms can screen people using multiple checks, all taking place at the same time, thereby creating a quicker and much more comprehensive compliance process.
By having the ability to integrate identity verification with a range of broader screening tools, businesses can gather a much clearer picture of a customer's risk profile, quickly, easily and without error.
With attempts to commit financial crime becoming more and more sophisticated, the property sector must adapt its compliance strategies accordingly, in order to keep up.
Digital identity verification and the use of AML technology in the property sector are fast becoming what businesses need in order to meet regulatory expectations, whilst still maintaining efficient operations.
Those companies that embrace technology-driven compliance solutions can not only streamline their KYC processes, but also build on their AML frameworks, all whilst at the same time, protecting the property market’s integrity.
Here at SmartSearch, our digital identity verification and KYC solutions help property professionals streamline AML compliance without slowing down business. By combining fast, secure identity checks with sanctions screening, PEP checks, monitoring adverse media, and clear audit trails, we help estate and letting agents onboard customers more efficiently while building a stronger defence against financial crime. If you’re looking to modernise your compliance processes and strengthen your AML framework, request a free demo today or contact our team for more information.