Without further ado…
You’ve recently been appointed COO at SmartSeach - can you tell us a bit about your journey to get to this point and the company in general?
I was born and brought up in Leeds. I studied marketing at university and after several roles in brand strategy and client management, joined SmartSearch in 2013 as a senior support specialist. Two years later, I was promoted to head of client services. In 2020, I was appointed to the board as client services director.
SmartSearch was founded in 2011 and is based in Ilkley, West Yorkshire. It is the leading UK provider of anti-money laundering software to more than 5,500 clients and 50,000 users in the financial services, legal, accountancy and property sectors.
Our mission is to help protect people and businesses by providing the most efficient and cost-effective client verification tools, delivering Anti-Money Laundering (AML), Know Your Customer (KYC) and Customer Due Diligence (CDD) information, ensuring our clients’ businesses remain compliant and protected. Most people cannot spot a fraudulent passport or driving licence, and the only secure way of checking that someone is who they say they are, is through checks.
Sanctions searches and monitoring are a central component of AML, which have been brought to the fore since Russia invaded Ukraine. Our system completes sanction and PEP (politically exposed person) screening on every AML check and then screens all customers every night to alert our clients to any changes.
Manual practices with insufficient checks or risk assessments have led to so many estate agents being fined for being in breach of Money Laundering Regulations.
You were the youngest-ever board member, and the first female in the boardroom - what challenges/barriers did you face along the way?
I think my career path demonstrates that SmartSearch and its directors worked hard to remove any gender barriers and championed my development and progression.
But there is no doubt that traditionally senior positions are male-dominated in the financial industry and I’m proud to work for a company which is committed to changing that narrative. A lot of companies talk about gender equality and diversity, but this isn’t reflected in their actions.
The proof of their commitment is in the reality of how diverse their leadership and exec teams are. At SmartSearch, our senior management team is more than 50% female and the boardroom is 30% female. We know we aren’t perfect, and we always want to improve (I’d love to see more women join us on the board!), but we’ve come a long way to rebalance gender inequalities and as inclusion is one of our core values, we are working hard to remove any barriers to enable us to find and employ the best person for the job, regardless of age, race or gender.
Does property still have a long way to become more equal, and provide better opportunities for young and ambitious females?
Like in finance, and many other industries, property has traditionally been a male domain. I think the latest estimates show that women make up just 15% of the workforce in the property and construction sector. So, it’s more than a professional issue, it’s also a cultural one. The only way to bring about change is to be proactive, to provide an environment which attracts women to the industry and then fairly reward them for their work, so young girls and women can see more role models in these sectors and that they are recognised and rewarded for their skills.
This is really important to me, creating an environment so our people can achieve success, helping to reduce imposter syndrome and remove gender barriers that make it difficult for them to succeed.
In my experience, inclusion brings diversity of thought and skills to the workplace, particularly when it comes to problem solving and building client relationships. From mentoring others, to sharing my own experiences, warts and all, I believe as a leader it’s your job to support and inspire others and personally it means a lot to be able to do this for other women in our business.
I truly hope the younger females in SmartSearch look at myself, Claire our FD and the rest of our female leadership team and see there is space for them.
Has AML become even more important since the war in Ukraine and the subsequent light that has been shone on 'dirty money' in London and the rest of the UK?
Yes, I’d say it has. The UK property market has long been targeted by criminals to launder money and the sanctions put in place since Russia’s invasion of Ukraine have brought this issue front and centre. But keeping pace with the ever-changing rules has meant onerous compliance challenges for those working in the property sector.
Any agents or brokers who still rely on old-fashioned paper checks are running the risk of breaching the sanction regulations. This is punishable by fines of up to £1m under the new Economic Crime (Transparency and Enforcement) Act 2022.
Ongoing monitoring is now an essential tool to keep pace with the regulations and the criminals - not simply to stop agents and brokers being vulnerable to criminal activity but also to keep the UK economy open and clean.
Do agents take AML seriously enough? For example, we recently saw HMRC reprimand more than 30 property companies for AML breaches.
At SmartSearch we have more than 1,000 agents using our AML electronic verification services. While that’s a significant number, it represents just 5% of the agents in the UK. That said, I think that many more agents are waking up to the benefits of electronic verification - not just because of possible censures but simply because their existing systems are falling over.
Digital onboarding doesn’t just bring compliance benefits. It also brings competitive advantage, at a time when more consumers are looking for a fast and simple customer journey during property transactions.
So many of the agents who have moved to SmartSearch say that manual compliance checks were becoming increasingly inadequate and unmanageable, particularly in the light of the continually evolving regulations. We need to make this digital compliance revolution accessible to all, allowing estate agents to reap the benefits of electronic verification by staying safe and avoiding fines.
Does tech have a huge role to play in making money laundering more difficult for criminals to achieve? And cleaning up the property industry in general?
Yes, it does. Agents are operating in an environment where knowing and understanding their customers has never been more important and tech makes that requirement infinitely more possible. Firstly, it makes the process of checking clients much quicker.
Keeping up with AML checks is a complex process. Manual documentation is open to forgery and manipulation. All of the SmartSearch checks use a wide range of data sources meaning we provide a composite digital identity which is incredibly difficult to forge. More importantly, those checks are ongoing. Our platform continues to monitor all clients automatically either daily, weekly or monthly, alerting estate agents to any changes in the sanction or PEP status of their clients.
Do we know how big a problem money laundering is when it comes to property? What more can be done to prevent it?
The latest figures from Transparency International UK estimate that £6.7 billion of suspicious funds have been invested in UK property since 2016. And the increasing number of HMRC fines levied against agents for breaching anti-money laundering regulations demonstrates that the problem is a growing one.
Often these breaches are unintentional, but that is not an excuse. As well as the cost of the fines, the names of the companies are published, and the breaches can do significant damage to the reputations of the firms involved.
In terms of what can be done, the solution is already there in electronic verification and, frankly, the wider property sector needs to wake up to its potential – to the fact that electronic AML checks are simply more secure, much quicker and more reliable than manual checks.
How do you relax away from the word of AML and software?
It’s the simple things for me, I love to spend time with my dog Red, a very bouncy Hungarian Vizsla, and my husband Paul. After a busy week at work, there’s nothing better than a nice long walk followed by a chilled evening in with good food, a glass of wine and dog cuddles!
Lastly, do you think the property market will be in a better place to combat the threat of money laundering in five years’ time?
The property market is ALREADY in a good place to combat money laundering! The electronic tools are already in place to make agents compliant and to protect them against increasingly sophisticated criminals.
Yes, this requires an investment on behalf of agents and conveyancing firms but it adds value by streamlining their processes and protecting them from financial and reputation damage. It also makes their working lives significantly easier. If the industry continues to lag behind on the adoption of electronic verification, criminals will increasingly target the sector. And then it really will be in a worse place.
Thanks for the great insight, Collette. My colleague and fellow video interviewer, Lee Dahill, at the end of last year carried out a video interview with Collette, which can be seen here.
Until next time…
*Nat Daniels is CEO of Angels Media, publishers of Estate Agent Today and Letting Agent Today. Follow him on Twitter @NatDaniels.