Smart way to comply with rules that target money-launderers

Martin Cheek and John Dobson have set up SmartSearch - an online anti money laundering system
Martin Cheek and John Dobson have set up SmartSearch - an online anti money laundering system
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AN online company which helps individuals and businesses comply with anti-money laundering regulations is on an “aggressive” growth plan to grab market

SmartSearch, based in Guiseley, Leeds, has created an online tool that allows organisations to comply with the know-your-customer elements of anti money laundering legislation.

Usually people are asked to supply a passport, driving licence, or utility bill to prove their identity.

SmartSearch has developed an electronic checking process, which bypasses the need for physical documents, making it quicker.

SmartSearch was set up in 2011 by John Dobson, founder of Leeds-based credit reference agency Callcredit, and Martin Cheek, who was a consultant at the same business.

It was officially launched in July this year and currently has 600 clients and about 3,000 users.

The company’s target market is the professional regulated sector, including solicitors, accountants and estate agents, and also the financial services sector, wherever there is an exchange of money or advice.

Mr Cheek told the Yorkshire Post: “Every regulated business we deal with has to identify and verify the identity of its clients.

“Because of the complex layer of businesses, these checks can become an absolute nightmare for a business.

“What we’ve developed is the only platform that allows businesses in the regulated sector to verify and identify individuals but also identify corporate clients, drilled down to beneficial owners.”

SmartSearch uses Experian and Dow Jones for its data.

Mr Cheek said a business would usually have five or six different platforms to carry out checks on individuals, which can take up to 15 minutes.

For corporate clients, the process could take 45 minutes to complete and also relies on individuals providing their documents, such as their passport and driving licence.

However, Mr Cheek said SmartSearch reduces the time to three seconds for an individual and two minutes for a company check.

“It’s cost saving and time saving,” he said.

The system also meets additional requirements of the regulations including sanctions screening and checking politically exposed persons, for example judges, MPs and civil servants, to ensure they aren’t laundering government money.

Mr Cheek said the company had the potential to tap into a huge market.

“There are 60,000-80,000 regulated organisations in the UK, from small book-keepers through to major banks,” he said.

“The market is massive. It’s not just in the UK – these are European regulations as well and there are similar acts in the US.”

Money laundering has become a hot topic recently with a number of high-profile cases.

In August, the UK subsidiary of Nigeria’s Guaranty Trust Bank was fined £525,000 for failing to have adequate controls to prevent money laundering.

The Financial Conduct Authority described the failing as “particularly serious”.

In June it was announced that Deloitte’s financial advisory unit would pay $10m and refrain for one year from new business with certain New York banks to settle accusations over its review of money laundering controls at Standard Chartered Bank.

Last year, HSBC received a $1.9bn anti-money laundering fine from the US government.

Mr Cheek said: “It’s not something organisations can ignore. The problem with the money laundering regulations is that it’s not a tick box process.

“Each organisation is different because of the way the different money laundering reporting officers approach risk.”

Mr Dobson, a veteran entrepreneur, said the pair planned to grow the business “aggressively”.

The company, which currently employs 15 people, is growing by 300 per cent year-on-year and expects to break the £1m turnover barrier in its next accounts.

Plans for the future include enabling companies to download physical documents, such as annual returns and certificates of incorporation.

It also wants to create a platform to monitor substantial changes within a company, for example fluctuations in credit scores and changes in legal notices.

The company also plans to develop internationally.

“We want to generate significant market share and become the market leader,” said Mr Dobson. “We want to be the ‘Apple’ of our industry.”

Twitter: @lizziecmurphy