The property sector gets a pummeling this week as online estate agent Purple Bricks was recently fined by the HMRC for beaching AML regulations.
Still in keeping with that theme, authorities in Germany recorded a record number of suspected financial crime cases, with most of them likely coming from the property sector.
As financial crime shows no signs of slowing down, banks are looking towards cutting compliance jobs to deal with financial losses caused by both the pandemic and Brexit.
Find out more on these stories below.
Purplebricks fined after money-laundering breach
The online estate agency Purplebricks has been fined more than £260,000 for breaching laws on money laundering.
HM Revenue & Customs said that it had been guilty of “failures in having the correct policies, controls and procedures, conducting due diligence and timing of verification”. It cannot appeal.
A Purplebricks spokesman said that it had improved its practices since the fine. “This is a retrospective and historical fine that dates back to activity in 2018. We have since conducted a full review of our processes and have significantly improved our compliance procedures,” he said.
Since the implementation of the 5AMLD, estate agents and other high value asset sellers are required to improve their money AML processes to avoid similar fines.
Germany sees record spike in money laundering cases, with extreme vulnerability in property
Germany's federal anti-money laundering unit registered a record 114,914 suspected cases of money laundering and financing of terrorism last year, this amounts to a jump of almost 50% compared to the previous year.
The bulk of these cases were flagged by German banks and other financial institutions, as well as notaries and estate agents.
Germany’s Financial Intelligence Unit (FIU) has previously reported that there is an "extreme vulnerability" in Germany's property market when it came to dubious business deals.
According to Transparency International, 15-30% of all proceeds from criminal activities are invested in property, either through building and renovating, or buying, selling and renting.
This shows that there is still a lot to be done when regulating the property sector, not only in Germany, but globally.
Banks’ next big target for job cuts: compliance
Compliance teams, which became large and powerful after the financial crisis, are in the sights of banks looking to reduce costs due to a triple whammy of the virus crisis, recession and Brexit.
It’s an irony. Finance firms abruptly burdened with hundreds of thousands of employees working from home leaned heavily on their compliance teams amid a mad scramble to get the right systems and controls in place.
But an explosion in new regulatory technology, combined with the pressure to cut costs in an economy already mired in recession ahead of a potential hard Brexit, makes compliance teams — now bloated because they were spared in years past — especially vulnerable.
HSBC and Credit Suisse are said to be some of the banks that are cutting compliance jobs.
As these job cuts come to light, do other smaller industries face falling behind on compliance from trying to save on compliance costs?
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