Plum Software, the number one independent specialist software house for financial advisers and mortgage brokers, has today announced the launch of an electronic identity checking service, in collaboration with GB Group, the identity management specialists.

The alliance between Plum Software and GB Group comes in response to a growing demand for instant, integrated customer identity verification. With compliance issues within the financial services industry on the increase, it is becoming more difficult and time consuming for advisers to keep on top of all the paperwork required to meet the regulations.

The integration of GB Group’s URU™ (the most comprehensive national ID verification tool available in the market) with Plum Software, transforms customer ID verification from a pile of paperwork and time consuming processes into the complete paper-less office solution. Advisers can now perform AML checks from within the same system that holds all their clients’ details - all in a couple of online clicks.

URU, jointly developed by GB Group and BT, allows users to cross check personal client details against a range of population data sources - including Electoral Roll, financial data supplied through Callcredit, telephone and address data, deceased and ‘gone away’ files.

With compliance issues on the increase, the FSA will continue to enforce their regulations and come down hard on those companies who fail to abide by them. The FSA Handbook (Principle 3) states that “A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems”. A recent review by the FSA of “Financial services firms’ approach to UK financial sanctions” led them to conclude that there are inadequacies in the systems and controls of many organisations as they relate to UK financial sanctions.

In their review the FSA encountered a number of misconceptions including:

· Firms who believed they were screening clients for financial sanctions purposes when they were carrying out only anti-money laundering (AML) checks. Screening against the HMT (Her Majesty's Treasury) list can and probably should be done at the same time as the AML check.

· Firms who believed they were somehow exempt from the financial sanctions regime if they processed only low value transactions – there is no minimum limit.

· Firms who believed that individuals and entities on the list were all based overseas. The list currently includes approximately 1,400 individuals, (about 50 of whom are UK residents) and 500 entities, (12 of which are based in the UK).

· Firms, particularly small firms, who believed financial sanctions screening was not necessary as they did not hold client money, did not make payments or deal in products they assessed as low risk for financial crime. This is not the case.

· Firms who believed that UK financial sanctions did not apply to insurance. Insurance cannot be provided to a target on the HMT list.

In their review, the FSA also found four areas of good practice, URU can help advisers to meet these recommendations including:

· Screening against the HMT list at the time of client take-on, before providing any services.

· Screening directors and beneficial owners of corporate customers.

· Screening of the entire client base within a reasonable time (say quarterly) following updates to the HMT list.

· Screening systems calibrated in accordance with your needs rather than what the solution provider suggests.

The FSA’s tougher stance on enforcement is highlighted in figures released by city law firm Reynolds Porter Chamberlain (RPC) showing that in 2008 the FSA handed out 55 fines and banned 46 individuals or firms from carrying out regulated activity – more than all previous years put together.

Ann Dempster, Managing Director, Plum Software, said:

“Financial advisers will come under greater scrutiny during 2009 as prosecutions against AML increase and the ripple effects of increased fraud from the credit crunch hit the industry. Failure to comply with AML obligations carries serious consequences.

Satisfying the requirements of both AML and HMT regulations is very difficult and expensive without some form of electronic system. In fact, you can’t reasonably expect advisers to spot PEPs, particularly as they relate to associates and family members without an electronic solution.

The alliance with GB and the integration of URU means our clients can perform AML and HMT checks through our single interface, helping them to meet their obligations and save time on extensive paper based tasks, giving them more time to concentrate on the needs of the client and improving their service.”