More than half of public sector leaders admit to being unaware of new money laundering regulations
New research has found that those working in leadership roles within the public sector are the least aware of new money laundering regulations.
Money laundering costs UK businesses, citizens and the government upwards of £190 billion each year1. In January 2020, in an effort to tackle the rising levels of fraud and eliminate money laundering, the government introduced new anti-money laundering (AML) regulations under the fifth money laundering directive.
Research², carried out by anti-money laundering service, SmartSearch, reveals the sectors in which those in management positions understand the new regulations the least, how confident they are in their compliance and whether they plan to invest in AML services this year. The sectors in which leaders were most likely to admit to having no knowledge of the new regulations are:
- Public services and administration (58%)
- Transport and logistics (52%)
- Teacher training and education (46%)
- Media and internet (43%)
- Property and construction (41%)
- Retail (34%)
- Recruitment and HR (33%)
- Hospitality and events management (33%)
- Healthcare (24%)
- Sales (21%)
The research shows that overall, only a third (34%) of the business leaders and decision-makers polled said they would feel confident in demonstrating their business’s compliance with current AML regulations. In particular, 32% of leaders and decision-makers in the public service and administration sectors admitted they are not confident they could demonstrate their businesses’ compliance with the new regulations. This is despite local authorities being subject to greater and ever more sophisticated attempts at fraud, including false identity documents, in an attempt to access public sector benefits.
Perhaps even more concerning, only 35% of business leaders in the accounting, banking and finance sector would be confident in being able to demonstrate their businesses’ compliance. A worrying statistic, given the importance of these regulations in this sector. What’s more, nearly one in five (19%) business leaders in the accounting, banking and finance sector said they aren’t confident their staff perform adequate checks.
Commenting on the findings, John Dobson, CEO at SmartSearch, says: “The new regulations were put in place in order to help tackle rising levels of fraud and eliminate money laundering, which has been a huge concern among UK businesses.
“However, it is surprising to see so many business leaders and decision-makers unaware of vital changes to the money laundering regulations, especially those in public and financial sectors, which can have a huge impact not only on their business but on members of the public. It is also worrying that business leaders do not understand their own company’s exposure to potential financial crime.
“Encouragingly, investment into AML regulations seems to be high on the agenda this year. More than three quarters (82%) of business leaders in accountancy, banking and finance said that investing in AML compliance is either their highest priority or a high priority in their business, and 92% of those in law said the same.
“There is a clear knowledge gap here that needs to be filled. We hope that this research will go some way in helping make business leaders become more aware of the regulation changes, and encourage them to put investment in their anti-money laundering compliance at the forefront of their business plans.”
To find out more about the new anti-money laundering regulations, visit: https://www.smartsearch.com/resources/blog/5-amendments-of-5th-anti-money-laundering-directive