Key players in the UK property industry have been criticised by MPs for ‘lagging behind’ on AML technology, and wasting too much time ‘checking each other’s checks’.
The All-Party Parliament Group met with representatives from the estate agency and conveyancing sectors to look at the current issues surrounding ID checks, and how Covid-19 and social distancing has exacerbated the problem.
MPs and Lords wanted to know why technology was not being used more to help revolutionise the way the property industry checks people’s identities under AML rules.
One of those representing estate agents was Hunters CEO Glynis Frew, she told the meeting that sometimes, agents are required to check identities ‘up to five times’ during a transaction, while Stuart Young, MD of Etive, admitted that often, conveyancers, lenders and estate agents were running duplicated checks because they are unable to trust each other’s AML procedures.
He also said that Covid-19 has made things even more difficult as they are unable to meet people face to face to check their IDs.
Both Frew and Young, along with Stephen Ward of the Council for Licensed Conveyancers, said there needed to be some sort of national ID checking system funded by the Government to enable everyone involved in the property industry to run robust and reliable ID checks that would be trusted by all parties.
They argued that, if made a legal requirement within the process of home buying and selling, it would become ‘self-funding’.
But John Dobson, CEO of SmartSearch -a digital identification and verification platform that can run full AML checks in seconds – says the technology is already in place and has been for some time.
He said: “I think it is very interesting to hear that those in the property industry are blaming a ‘lack of technology’ and ‘lack of funding’ for why their compliance procedures are so inefficient.
“The UK RegTech industry is the most advanced in Europe; the technology for digital, remote AML checks has been available for years, but there has been a fairly low take-up within the UK property industry.”
More than two years ago, the 5th Money Laundering Directive said electronic verification should be used for AML checks wherever possible, while for the past year, social distancing has made it almost impossible to run manual checks.
“Given the MLDs guidelines and the disruptions the pandemic has caused, it is quite astounding that so many are still relying on manual checks,” he said, continuing.
“Whether this is a lack of awareness of the technology that is available, a lack of willing, or simply a misconception that switching to digital checks is expensive, I don’t know. What I do know is that the technology is ready and waiting. It is cheaper and more efficient than manual checks, and it has the ability to transform the way estate agents, lenders and legal firms run their AML programs.”
In contrast, for those in the property industry that have already taken advantage of AML solutions, there are significant benefits and efficiencies being achieved, especially during the current national lockdown. Estate agents and property firms have been able to save significant time and money as well as completing checks remotely, for example via an App, which means AML for estate agents has never been more convenient. Furthermore, the latest technology such as facial recognition provides additional speed of access and removes the need for face-to-face contact.
Therefore, with an obvious need and drive to improve processes and efficiencies across the property industry, combined with current social distancing measures, there has never been a better time for the industry to invest in AML technology.