Estate agents are risking fines by relying on inadequate compliance reporting and auditing procedures, digital compliance expert, Martin Cheek, warns.
The managing director of SmartSearch says that inefficient, legacy reporting processes are undermining the productivity of firms – leaving them exposed to unnecessary downtime, fines and reputational damage in the event of a breach of anti-money laundering or sanctions regulations.
Cheek commented: “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.”
Firms that fail to comply with AML regulations face strict liability offenses and criminal prosecutions, as well as fines.
