Martin Cheek’s goal is to build an anti-money laundering and identification platform which covers both individuals and corporations anywhere in the world and he is well on his way.
Mr. Cheek is managing director of SmartSearch, a company providing comprehensive AML services. Based in the United Kingdom, SmartSearch recently expanded into the United States by opening an office in Utah. He has worked in the credit and security fields for two decades.
After a successful exit in 2010 Mr. Cheek set up SmartSearch. His is a crowded field but SmartSearch is holding its own, as they have more than 5,000 clients in the UK and are adding between 800 and 900 every year, with focus on legal, real estate, financial services firms and accountants. In the USA they work with fiservs, fund managers, brokers, credit unions, wealth managers and smaller state banks.
SmartSearch gathers data from many sources and merges it together to make intelligent assessments, Mr. Cheek said. They use their own technology and some from other companies. Different levels of reports can be produced basked on the risk factor.
“We massively reduce the false positives and the noise you get out of using a single screening product,” Mr. Cheek said. “It massively saves organizations time.”
The COVID-19 pandemic has changed behavior patterns, Mr. Cheek said. In normal times someone opening a bank account, for example would bring in various documents, but that now is done online, bringing fraud risk for the institution and document safety worries for the individual.
The 2020 Anti-Money Laundering Act is a good start for the United States, Mr. Cheek said. One provision requires all US-based businesses to supply details of beneficial owners to FINRA.
If the Yanks want to go further they could look to the United Kingdom and parts of Europe, Mr. Cheek said. Such registers are made public whereas in the United States details vary by state and ownership records are not always in the public domain.
“My gut feeling is its a step in the right direction, however they should make this data available to regulated businesses so they can fulfill their obligations, which they do have, over the Bank Secrecy Act and the Patriot Act,” Mr. Cheek said.
SmartSearch provides its clients with the tools to fulfill their obligations, which need to be met in a rapidly changing climate, Mr. Cheek said. When he entered the business in the 2000s it was easy to buy an entire new identity online. While it is still possible, much activity has multiplied as fraudsters sell bulk ID on the dark web.
Facial recognition technology is improving but still has obstacles to overcome, Mr. Cheek said, as it struggles with recognizing some skin tones. It’s a hot industry topic. There are efforts to improve, as success rates with different tones are published monthly. SmartSearch addresses this by adding a manual review by staff and working with their technology partners.
Another challenge is the limited data availability in some countries, Mr. Cheek explained. That makes it challenging to track politically-exposed persons. Some countries have extensive sharing networks between financial institutions and credit reference agencies, while others do not. Ireland has no such agency but their banks share information. Spain and Portugal only share public and default data which leaves someone with no issues with no footprint.
Financial services are limiting the damage caused by fraudsters because of the level of sharing and the improved technology.
“Its very difficult to create a false credit file because often the people that are sharing the data like credit unions, banks or financial institutions have had to do proper due diligence on the individual before they get those accounts,” Mr. Cheek said.
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