Compliance expert slams unnamed non-compliant agents

A compliance expert is criticising unnamed agencies for risking fines “and wasting time and money” by relying on inadequate compliance reporting and auditing procedures.

Martin Cheek, managing director of SmartSearch, does not name the agencies he has in mind.

But he says that “inefficient legacy reporting processes” leave some agencies exposed to unnecessary downtime, fines and reputational damage in the event of a breach of anti-money laundering or sanctions regulations.

Cheek says: “Firms are required to regularly update their compliance policies and procedures and part of that process is to demonstrate a robust and up-to-date audit trail, giving a comprehensive overview of their adherence to regulatory guidelines.

“Audit reports demonstrate the validity and thoroughness of the firms’ compliance preparations, along with security policies, user access controls and risk management procedures.

"Illicit funds will continue to wash through the UK while some firms continue to rely on inadequate or incomplete audits.

"Breaching the rules unintentionally is not a defence. If the regulator knocks on your door, not having a proper audit trail is inviting a fine and reputational damage. Being audit-ready also minimises the considerable – and costly - management time which comes when a potential breach is being investigated.

“Being audit-ready doesn’t just save time and money, it also safeguards reputations and avoids the hefty fines and criminal prosecutions that come with compliance breaches."

Letting Agent Today asked for the identity of the agencies which had allegedly risked fines and wasted time and money on AML processes - but we were told that this information was confidential.

"Firms must stop wasting time and resource on reporting; by adopting a fully automated and easy-to-understand compliance platform – you get the reports you want or need immediately” says Cheek.