43% of property professionals are not improving their anti-money laundering processes because they either don’t care or don’t think they will get fined, according to a survey from anti-money laundering tech scaleup, First AML.
First AML surveyed 250 real estate professionals across the UK and also found that 36% of real estate professionals haven’t reviewed the sanction list in the last month.
Worryingly, the research found that 48% have identified an instance of suspected money laundering in the past three years. Alongside this, 59% of respondents are not completely confident in their AML procedures.
Despite the growing threat, 42% of respondents said they are considering cutting their compliance budget in light of the expected recession. However, this is unsurprising when maximising profitability was ranked as the highest business priority, while protecting their reputation was identified as the lowest priority.
Simon Luke, UK Country Manager at First AML, commented: “Property professionals need to be more vigilant when it comes to their anti-money laundering processes. Turning a blind eye because they believe the severity of fines is small or inconsequential is a very dangerous mindset. It's time for the real estate sector to ensure they have a robust process in place in order to prevent dirty money from passing through their systems.”
When asked what they believed was the weakest part of their AML process, the majority of property professionals surveyed said training staff on the latest regulations (29%). This was closely followed by document collection for individuals and companies (24%) and getting staff to actually follow procedures (23%).
To become more compliant, 78% are implementing technology. Alongside this, 60% are looking to increase budgets for emerging tech and implement AML software in 2023 to avoid AML non-compliance fines.
However, on a positive note, 82% of real estate professionals say money laundering has become a greater focus in 2022, with the majority saying this is because of an increased focus on customer transparency and ethical customer onboarding (60%).
Simon concludes: “The sector needs to reassess its priorities. And that means implementing innovative technology solutions that can not only reduce costs and the administrative burden of compliance but also ensure businesses are doing the right thing."
