The Role of Public Registers in Detecting Financial Services Fraud

Key points

1) Fraud risk often begins with unverifiable claims

Financial services fraud commonly exploits a gap between what is claimed and what can be confirmed. Where regulatory status cannot be independently verified, misleading representations become easier to make and harder to detect. Reliance on certificates, screenshots, or intermediary assurances introduces avoidable risk.

2) Registers as a first-line AML control

Public registers support initial screening by allowing counterparties to confirm whether a firm is licensed, whether the license is active, and whether the claimed activities fall within authorised scope. This supports risk-based onboarding decisions and helps institutions apply proportionate due diligence.

3) Supporting ongoing monitoring

AML obligations continue after onboarding. license suspension, restriction, or revocation are material risk events. Registers that reflect status updates help prevent continued reliance on outdated assumptions and support periodic review processes.

4) Detecting impersonation and clone activity

Registers are particularly relevant in identifying impersonation risks. By comparing the legal entity name, authorised activities, and license references, users can identify inconsistencies that may indicate misrepresentation, cloning, or identity substitution.

5) Registers do not replace AML judgement

Public registers are a verification tool, not a guarantee of conduct. They do not replace broader AML assessments. However, the inability to verify regulatory claims through authoritative records should itself be treated as a relevant risk indicator.

Closing observation

Fraud thrives where verification is difficult. Public registers reduce that difficulty by making regulatory claims observable, current, and independently checkable. This strengthens AML controls across the financial system without adding unnecessary complexity.