Regulation Update: The Economic Crime and Corporate Transparency Bill

Following on from our recent series of regulatory roadmap briefings, FullCircl explores the impact of the Government’s latest commitment to tackling economic crime and improving transparency over corporate entities.

What is the Economic Crime and Corporate Transparency Bill?

Currently at committee stage in the House of Commons, the Bill follows on from the Economic Crime (Transparency and Enforcement) Act, passed in March 2022 in response to the Russia/Ukraine conflict. This legislation served to significantly simplify the process for imposing sanctions, identifying, and tracing illicit wealth, and preventing ‘oligarchs’ from seeking damages.  

The new Bill takes this a step further, aiming to mitigate the risk of bad actors taking advantage of the openness of the UK economy to perpetrate fraud, money laundering and organised crime. The government is committed to bringing this latest bill forward to deliver a wider-ranging suite of reforms on tackling economic crime and improving transparency over corporate entities.

The Bill will deliver:

• Reforms to Companies House
• Reforms to prevent the abuse of limited partnerships
• Additional powers to seize and recover suspected criminal crypto assets
• Reforms which give businesses more confidence to share information to tackle money laundering and other economic crime
• New intelligence gathering powers for law enforcement and removal of nugatory burdens on business

In terms of financial institutions’ ability to find the right customer, onboard them faster and keep them for life, it is the first point – reform to Companies House – that will have the biggest impact.

Why the need to reform Companies House?

The Bill aims to transform the role and operation of Companies House, which has come under fire from organisations including UK Finance for being “dysfunctional” and helping to facilitate business fraud. Banking leaders have also entered the debate, criticising the online register of UK-based companies. It’s worth pointing out that Companies House is itself in favour of reforms and wants to act as a preventor of fraud and economic crime.

The aim of the Bill is to ensure that information held at Companies House is more reliable and accurate. It will be given greater powers to question and challenge information that is submitted, as well as add or remove inaccurate information. It is also anticipated that further legislation will allow for the cross-referencing of Companies House data against other corporate data sources.

The Bill focuses on improving content at Companies House and delivering data protection in the following ways:

• Knowing who is setting up, managing, and controlling corporate entities
• Improving the accuracy and usability of data on the companies register
• Protecting personal information
• Ensuring compliance, sharing intelligence, and other measures to deter abuse of corporate entities

What does this all mean for financial institutions?

For financial institutions, transforming Companies House from a passive library to a proactive gatekeeper will deliver greater transparency, and greater confidence in the information held, as well as more accurate information for identifying and mitigating potential financial crime risks.

However, this is not going to happen overnight. It’s going to take time for Companies House to manoeuvre through this, and we can likely expect a phased approach to both implementation and remediation.

So, how to stay ahead of reform?

As UK Finance recently pointed out, a greater focus on transparency, data quality and reliability will require the harnessing of technology. Opportunities include:

• Automated data validations, screening, and cross-checking
• Machine learning and data analytics
• Data Matching and graph database technology
• Adverse media screening
• API-driven data sharing

The great news is that FullCircl can help you deliver on all these opportunities.

Improving decision-making has always been at the heart of what we stand for. We welcome these reforms and the impact they will have in terms of greater transparency, accuracy, and reliability of data for our financial service customers.

It’s also great news for us. Companies House is just one of many data sources our Customer Lifecycle Intelligence solution harnesses to deliver super-connected, enriched data and unique insights on companies and the officers inside them. The more reliable the data, the more valuable our tools, applications and business logic become – helping our customers find customers that fit their risk profile, onboard them quicker and keep them for life.

Customer Lifecycle Intelligence is not static data - we deliver a multi-dimensional view that combines advanced data ingestion, validation, data matching, and augmentation with real-time media screening and more. All neatly delivered via web app or API.

Whether it’s automated data collection and critical checks, ensuring compliance, confidently targeting the right customers, or growing advocacy through frictionless onboarding and support, FullCircl is helping the UK’s leading banks and financial services providers do Better Business, Faster.

Take a read of some of our resources or customer stories to find out more. When you’re ready to talk, get in touch with a member of our team today.