Increasingly Complex Regulations Damaging Growth Prospects for UK Businesses, Says SmartSearch

Up to three-quarters (72 percent) of regulated companies feel overwhelmed by current anti-financial crime compliance requirements; according to the latest study by a digital compliance and anti-money laundering (AML) solution provider SmartSearch.

In studying, ‘The Prediction of Compliance‘, SmartSearch revealed that while regulations play an important role in combating increasingly sophisticated criminal activity, many businesses are finding it challenging to navigate the growing complexity. As regulatory requirements expand, surveyed companies report difficulty managing compliance effectively, due in part to reluctance to embrace digital solutions.

Financial crime costs the UK around £100billion a year, leading to real-world problems such as human trafficking, money laundering, and drug trafficking. In response, regulations have become more complex, with SmartSearch finding that it leaves 73 percent of businesses worried about their ability to remain compliant, while 30 percent have significant fears about the coming year.

With new regulatory complexities seemingly around the corner, some 76 percent of organizations feel that regulatory changes are hindering expansion, while more than one in ten (13 percent) feel that the Compliance obligations harm customer relationships.

This comes in part due to the fact that compliance costs have increased significantly, with 74 percent of businesses experiencing financial difficulty in the past three years. Nearly a third of respondents now see compliance-related costs as a barrier to profitability – a key issue that leads to negative economic consequences.

Making compliance a ‘strategic advantage’

While around 31 per cent of businesses list financial crime as a key factor hindering UK economic growth, underscoring the importance of regulations, growing growth concerns suggest the need to look the current frameworks to ensure that they strike a balance between protection and growth.

Phil CotterCEO of SmartSearch, commented: “The Compliance Forecast offers us a view of the major challenges regulated businesses face in an increasingly complex landscape. With financial crime costing the UK up to £100billion a year, strong regulation is vital. However, as it becomes more complex to keep up with criminals, businesses must respond accordingly to ensure they are able to grow and continue to deliver the best customer service.

“Adopting a proactive, digital-first strategy offers businesses a streamlined compliance process, reduced costs, and enhanced customer experiences. Organizations that embrace these solutions are better off equipped to navigate changing regulations and mitigate risks.

SmartSearch also outlines some steps to help businesses transform compliance from a burden to a strategic advantage. This means that there is no one size fits all solution. Tailoring solutions to industry-specific risks enables companies to address their unique regulatory challenges more effectively.

It says businesses should view compliance as an ongoing journey. By combining digital tools, sector-specific strategies, and collaborative efforts, companies can turn compliance into a core strength that supports sustainable growth while protecting themselves and their customers.