"It is surprising to see so many business leaders and decision-makers ignoring vital changes to the money laundering regulations, which can have a huge impact on their business."
More than one in four (26%) business leaders admit they have no knowledge of recent changes to money laundering regulation and what they need to do to remain compliant, according to new research from SmartSearch.
Government figures show that money laundering costs UK businesses, citizens and the government upwards of £190 billion each year. In January 2020, in an effort to tackle the rising levels of fraud and eliminate money laundering, the government introduced new anti-money laundering regulations under the fifth money laundering directive, which all UK businesses must comply with.
However, fewer than one in three (28%) business leaders are fully aware of the fifth money laundering directive regulations and what they need to do in order to be compliant, while one in four (26%) admit they’re not aware of the new regulations at all.
Business leaders and decision-makers in the public services and administration sectors are the least aware, with over half (58%) saying they did not know about the changes.
Additionally, less than half (46%) of business leaders in the accounting, banking and finance sector said they are fully aware of the updates - a worrying statistic given the importance of these regulations in this sector.
Moreover, 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 anti-money laundering regulations, and one in five (20%) don’t know if their staff perform adequate Sanction & Politically Exposed Person (PEP) screenings.
Less than a quarter (23%) of those polled rated their understanding of their business's exposure to financial crime, and how they can protect themselves from this, as very good.
Despite data indicating a clear lack of knowledge, only one in five (20%) said their business plans to invest more in anti-money laundering compliance this year.
John Dobson, CEO at SmartSearch, said: “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 ignoring vital changes to the money laundering regulations, which can have a huge impact on their business. It is also worrying that business leaders do not understand their own company’s exposure to potential financial crime.
“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 to 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.”