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At its core, compliance is all about building and maintaining your company’s reputation as a reliable, trustworthy, and professional partner to do business with. But with a new report finding total financial crime costs to be estimated at £34.2 billion per annum—a significant increase of 19% over a two-year period—it's clear that more businesses need to start taking compliance more seriously in the New Year.
When other organisations and individuals are considering who to choose for their needs, your company’s reputation will be among the first thing they consider.
And with hefty fines and detrimental penalties for non-compliance, investing in compliance needs to be much more than a tick-box exercise. Let’s explore further.
The impacts of money laundering
Money laundering is a real threat. In fact, statistics from the United Nations Office on Drugs and Crime estimate the amount of money laundered globally exceeds between 2-5% of the global GDP.
Not only can money laundering and associated financial corruption corrode faith in democratic structures and take away command of economic policy from the government, but failing to prevent it can risk damaging the moral and social standing of society. The effects of this? Even greater exposure to other unsavoury and criminal activities such as drug trafficking, smuggling, and corruption.
When done correctly, anti-money laundering (AML) procedures protect the most vulnerable members of society by helping to engender societies where crime is less prevalent, and where financial inclusion is facilitated by accurate and reliable KYC processes.
Similarly, having these preventative strategies in place is particularly important because of the international financial role that the UK has, as well as the liberal nature of its company formation regime, and the safe-haven status of its property market.
1. Tackling money laundering will assist in tackling crimes of all types
Money laundering legitimises the proceeds of crime, allowing drug gangs, human traffickers, and other types of criminals to expand and reap the rewards of their criminal operations.
By strengthening AML procedures, you can contribute to a healthier, more ethical economic climate, and build yourself a reputation that precedes you to potential customers and maintain customer satisfaction among those you already serve.
2. Investment in compliance is investment in customer trust
In recent years, we’ve seen a much larger move towards GDPR compliance, with more customers needing reassurance that their data is safe and secure with any companies they share it with. Add the new FCA Consumer Duty plans into the mix, which focuses on creating continuously good customer outcomes, and it’s difficult to ignore the power that customer trust holds.
And with the True Cost of Compliance report revealing that firms are expecting robust growth in the next three years to drive more customers, and therefore more screening, there’s no better time than 2024 to get your compliance processes up to speed.
When you invest in compliance and compliance ecosystems, you not only meet customer expectations and gain their trust as they will value the intent behind your policy and the efficiency of its execution, but investing wisely can add real value across other areas of your organisation. You can unlock means to the best possible long-term profitability, while ensuring solid customer intelligence, business continuity, regulatory health, and brand security.
3. It contributes to social stability
Solid, mature economies, with relative social stability—such as the UK—will inevitably attract large-scale funds from overseas and internally. However, the very stability that underlines such attractiveness depends on ensuring such funds are clean.
By utilising compliance procedures, such as proof and source of funds checks, you can help to ensure money being transferred not only through your business, but also into the wider economy, is legitimate. This helps to strengthen the overall stability of our society; therefore, communal AML compliance is of benefit to all.
4. Compliance platforms are simpler and more efficient than ever before
Channels into global financial systems have become deeply digitised which, while enabling us to conduct more advanced tasks, have offered increased opportunities for money launderers to move funds and encourage fraudsters to get away with, and continue carrying out, criminal activity easily and clandestinely.
As a result of these novel threats, we’ve seen increasing market demand for intelligent, flexible, and easy-to-use AML and AF solutions, and powerful yet accessible electronic identity verification solutions. In doing this, you can take the workload off your teams’ hands, enabling them time back to focus on other important core tasks.
When you utilise automated compliance solutions, you don’t just minimise the risk of human error, but you can also benefit from quicker onboarding time, helping to keep customers happy, secure, and engaged with your business.
Ensuring your business complies with AML regulation is crucial for building a financially healthy and viable business, while protecting your customers and meeting their demands. And while you’ll no doubt already have some compliance measures in place, it’s no secret that these can be manually very laborious and demanding.
But with the FCA’s final Consumer Duty deadline approaching in the summer of 2024, there’s no better time to invest in automated compliance solutions that can save your teams time, while adhering to the regulations and increasing customer trust levels.
Not sure where to start? Get in touch with our team today to learn how Veriphy can help you stay on the right side of regulators and enhance the onboarding experience for all your customers, and beyond.