The average estate agent is just 53% of the way through their plans to implement Fifth Anti-Money Laundering regulations (5MLD), according to recent research from global data analytics provider LexisNexis® Risk Solutions.
The directive was introduced over a year ago, but the slowness of many firms in reacting to the change means that they are now at risk of penalties from the regulator for non-compliance, as well as potentially allowing illicit activity to go undetected.
Over 875 compliance professionals across the real estate, banking, accountancy, lending, wealth management and legal sectors were surveyed as part of the research, which was carried out with the aim of showcasing how businesses are operating within the current anti-money laundering framework.
The research found that, when it comes to using 5MLD as a means of detecting and deterring financial crime, estate agents were most optimistic about the impact it would have, with 77% of agents saying they believe it would have a net positive impact versus an overall research average of 60%.
This positivity from estate agents towards 5MLD suggests that the struggles faced by them in implementing it do not stem from a lack of will, rather a lack of guidance on how to comply. Indeed, 95% agreed that the regulator should give more information on how to make their compliance programmes more effective.
In addition, estate agents are particularly in favour of additional guidance as 89% of them expect to see more anti-money laundering (AML) regulation as a result of Brexit, versus the overall sample average of 78%.
These findings reflect previous research carried out nine months following the introduction of 5MLD, in which 38% of estate agents stated that the support they had received from the regulator to help them implement it was ‘excellent’ compared to an overall study average of 43%.
Nina Kerkez, director of UK&I Consulting at LexisNexis® Risk Solutions, comments: “The regulatory burden of 5MLD is hugely challenging for all industries, but it appears that compliance professionals in the estate agent industry have been on an uphill battle to try and meet the directive’s requirements. It’s not the case that estate agents are resistant to the changes, far from it in fact; they’re able to see the value such regulation can bring to fighting financial crime. Instead, it appears there is a disconnect between the regulator and the support the industry requires to meet its obligations.”