Almost half, or 48%, of regulated firms in the UK reported seeing a rise in financial crime attempts over the last year, with a further 26% adding they were victims themselves, according to SmartSearch.

Legal firms, including conveyancers, were hardest hit with a third saying they had been victims of financial crime, says the RegTech firm’s survey of 500 regulated businesses in the financial services, legal and property sectors.

There were also significant variations across the regions of the UK with 64% of regulated businesses in the East Midlands reporting a rise in fraud attempts, and 55% in London.

The survey says: “The increase in financial crime and money laundering has been driven primarily by the gaps in security that opened up due to the global coronavirus pandemic, as businesses rushed to adapt to new working practices.

“Carrying out processes such as Know Your Customer checks, and the due diligence required by anti-money laundering regulation, became increasingly challenging as face-to-face meetings were banned.”

But the report adds, while criminals were able to take advantage of those changes by making forgeries of hard documents such as passports and driving licences, legislation was introduced last September to help businesses by endorsing the use of electronic verification.

However, the survey revealed that 13% of firms were not aware of the change.

SmartSearch chief executive John Dobson says: “There’s no doubt the conditions since the outbreak of Coronavirus have been ripe for criminals to seize the opportunity for money laundering and other fraudulent activities in the property market.

“They have been able to do this because a lot of businesses still rely on manual methods of verification when onboarding new customers.

“Even so, the fact that half of the businesses we surveyed have reported an increase in criminal activity brings home the sheer scale of the problem.

“The most effective way of preventing this is by switching to a digital solution which does away with the need to riffle through documents which are easily forged by today’s organised crime gangs.

“In September 2020 the Money Laundering and Terrorist Finance Act recommended the switch to electronic verification, so it’s a concern that more than one in ten firms are still not aware of it.

“It is a key development in the anti-money laundering sector as a digital platform ensures your business is 100% compliant with Financial Conduct Authority regulations at all times.

“This avoids the potential for punitive fines or even criminal proceedings for non-compliance if your firm is found to be in breach.”