The ECCTA mandates identity verification (IDV) for directors, persons of significant control (PSCs), shareholders, and document deliverers to the Companies House registrar.
According to FullCircl, this requirement is pivotal in enhancing the reliability of data at Companies House. Yet, many financial institutions may not fully grasp the financial magnitude of IDV obligations for all associated parties.
While the reforms aim to solidify the UK’s defenses against economic crimes, they impose significant expenses. A report by the Department of Business and Trade suggests that the annual direct cost to businesses for shareholder IDV could reach approximately £154m. This figure reflects just a fraction of the broader financial impact anticipated.
Shareholder IDV represents about 75% of the total projected expenses of the Companies House reforms. Before these changes, companies were only required to provide basic shareholder details. Now, the extended data collection and verification responsibilities are estimated to incur substantial costs: around £787m in the first year and about £89m annually thereafter for ongoing submissions.
Despite the burdensome costs, the transition to efficient IDV processes offers a significant opportunity for cost reduction. Currently, many institutions rely on outdated or disjointed IDV methods. However, leveraging modern technologies to automate these processes can markedly decrease both the complexity and expense of compliance. Surveys indicate that 65% of corporate risk and compliance officers believe that adopting technological solutions can greatly facilitate regulatory adherence.
W2 by FullCircl exemplifies technological innovation in easing the IDV burden. It provides a unified platform offering robust data access and real-time information verification for directors, PSCs, and shareholders. Services include ID and age verification, PEPs and sanctions screening, document checks, facial comparison, and more. Such tools not only simplify compliance but also ensure accuracy and efficiency in meeting ECCTA requirements.
Copyright © 2024 RegTech Analyst
Copyright © 2018 RegTech Analyst
