The Top 10 Industries With Most Suspicious Activity Reports

Powered by LawFuel – UK industries submitting the most Suspicious Activity Reports revealed

Banking sector submits over 380,000 Suspicious Activity Reports (SARs) a year
The number of SARs being submitted increased by 3% in 2019
New research reveals which industries submit the most Suspicious Activity Reports

New research reveals which industries in the UK submit the most Suspicious Activity Reports, with banks and building societies leading the way.

Suspicious Activity Reports^[1] (SARs) are submitted to the National Crime Agency by individuals or institutions such as banks, estate agents, solicitors and accountancy firms. The reports are submitted when a person or organisation suspects someone of being involved in suspicious activity, such as money laundering or terrorist financing, and aim to alert law enforcement to potential instances of these crimes.

To highlight the risks of money laundering and fraudulent activity currently impacting UK businesses, anti-money laundering service, SmartSearch, has analysed the total number of SARs submitted over 12 months to find the industries that have seen the highest volumes.

Overall, the number of SARs being submitted is increasing year on year, from 463,938^[3] in 2017/18 to 478,437^[2] in 2018/19 (+3%). UK banks submitted over 380,000^[2] Suspicious Activity Reports between April 2018 and March 2019; accounting for 80% of total reports submitted in the 12 month period.

The top ten industries and institutions with the most Suspicious Activity Reports^[2]:

Banks (383,733)
Building societies (21,714)
Other entities regulated by the Financial Conduct Authority (12,046)
Money transmission (11,591)
Electronic payment (9,517)
Bureau de change (6,662)
Credit card (5,728)
Accountants (4,976)
Gaming (4,153)
Finance companies (3,020)

Money obtained through illegal activity, such as drug trafficking and theft, must be ‘cleaned’ in order for it to be spent, so as not to raise suspicion of law enforcement. Banks are the prime target for this as once the money has been ‘cleaned’ and incorporated into the financial system, it is very difficult for the authorities to recognise it as suspicious.

Banks are required to report large cash transactions which may be indicative of money laundering, but these can sometimes slip through the net. For example, in 2019, the Financial Conduct Authority fined Standard Chartered bank £102 million^[4] for anti-money laundering breaches which included opening an account with three million UAE Dirham (£500,000) in cash in a suitcase.

Money launderers target building societies in a similar way to banks. The 43 building societies in the UK have assets totalling close to £415 billion and hold 23% of the total outstanding residential mortgages in the UK (£330 billion)^[5], which highlights the scale of this industry and its appeal to criminals.

Third in the list of most SARs submissions are firms regulated by the Financial Conduct Authority, of which there are 50,000 in the UK that provide financial products and services to both UK and international customers^[6]. These companies include insurers, investment firms and credit unions, all of which can be prime targets for money launderers.

John Dobson, CEO at SmartSearch, adds: “Law enforcement cannot tackle the enormous problem of money laundering by themselves, they need assistance from institutions that may be targeted by money launderers. The Suspicious Activity Report system is crucial in stamping out money laundering from our financial system and organisations should submit reports as frequently as necessary. Private citizens can even submit reports if they suspect something is amiss.”

“It’s worrying to see the total number of reports increasing year on year however it does indicate that industries and perhaps individuals are becoming savvier to this type of illegal activity. There are a lot of ways in which businesses can protect themselves from fraudulent activity and it’s important that this remains high on business leaders’ agendas in 2020.”

To find out more, visit: https://www.smartsearch.com/resources/blog/submitting-effective-suspicious-activity-reports