Mortgage Soup fires the questions at David Jones, director at digital compliance and onboarding solutions supplier Click2Check.

Mortgage Soup (MS): The regulatory landscape is becoming increasingly complex for brokers – where are firms most exposed right now on compliance risk?

David Jones (DJ): Firms are most exposed where compliance is still treated as a back-office tick-box exercise rather than as part of the advice journey. AML, KYC, affordability evidence, source of funds, ID verification and audit trails all need to be captured clearly and consistently. The biggest risk is not always failing to do the check, it is failing to prove that it has been done, when it was done, and why the adviser proceeded.

The firms who keep up will win by making compliance part of the client journey, not a barrier to it. Robust checks, done early and digitally, protect the adviser, protect the client and create a better outcome for everyone.

MS: How are intermediaries adapting to AML, KYC and ongoing monitoring, and where are the gaps still most evident?

DJ: Many firms are improving, but the market is still inconsistent. Larger networks and more progressive broker firms are moving towards digital checks, centralised records and better onboarding journeys.

The gaps are most obvious where firms still rely on photocopies, emailed bank statements, manual notes or fragmented systems. That creates duplication, delays and a weaker bank of evidence.

MS: Digital ID and verification tools are gaining traction – how far along is the UK mortgage market in adopting these solutions in practice?

DJ: The market is moving, but adoption is not yet universal. Digital ID is gaining traction because it is quicker, safer and gives a stronger audit trail. However, there are still firms using traditional document checks because “that’s how we’ve always done it”. The direction of travel is clear: digital verification will become the expected standard, not the exception.

MS: To what extent are brokers still relying on manual compliance processes, and what risks does that create in today’s environment?

DJ: Too many brokers are still relying on manual processes. Manual processes increase the risk of human error, inconsistent files, missing documents and weak audit evidence. In today’s environment, that is dangerous. If the FCA, lender or network asks for evidence, firms need to be able to produce a clean, time-stamped compliance trail quickly.

MS: What impact is the latest government guidance around digital verification services having on how firms approach identity checks?

DJ: It is pushing firms to take digital identity more seriously. The latest guidance gives the market more confidence that digital verification services can form part of a robust identity-checking process. It also raises expectations. Firms can no longer assume photocopying a passport or driving licence is the strongest approach.

MS: Cost pressures remain a major issue for intermediaries – how can firms balance robust compliance with the need to remain commercially competitive?

DJ: By using technology that reduces duplication. Compliance should not mean adding more admin. The right tools make checks quicker, cheaper and more consistent. A single platform that brings credit data, open banking, AML, sanctions, PEPs and IDV together helps firms control costs while strengthening oversight. Good compliance should protect margin, not destroy it. It should deliver better conversion stats alongside increased revenue.

MS: Where do you see the biggest misunderstandings among brokers when it comes to meeting their regulatory obligations?

DJ: The biggest misunderstanding is that completing a check is the same as being compliant. It is not. Firms need evidence, consistency, rationale and an audit trail. Another misunderstanding is that AML is only relevant when something looks suspicious. In reality, firms need a clear process from the start, including sanctions and PEP screening where appropriate.

MS: How is client onboarding evolving, particularly in terms of speed versus scrutiny, and what should brokers be prioritising?

DJ: Onboarding is becoming faster, more digital and more data-led. But speed cannot come at the expense of scrutiny. Brokers should prioritise getting the right information early – identity, financial position, banking behaviour, credit profile and risk flags. The quicker advisers understand the full picture, the better the client journey and the lower the compliance risk.

We’ve recently added IDV capability to our online platform to help advisers do just that. In minutes through our service, they can carry out passport and driving licence checks from their phone, without the need for any paperwork to be shared manually and prior to providing the client with any advice. It’s quick, secure and frictionless.

Alongside our other services – AML with sanctions and PEPs, credit and open banking reporting – advisers can quickly gain a foolproof snapshot of their client in very little time at all.

MS: What role will automation and AI play in compliance over the next 12 to 24 months, and are firms ready for that shift?

DJ: Automation will remove repetitive admin and help firms spot issues earlier. It will also support smarter fact-finds, budgeting, vulnerability indicators and case triage. But firms are not ready if their underlying data is poor or fragmented. AI will only be useful if the information going in is accurate, secure and structured.

MS: Looking ahead, what are the key regulatory or market developments that mortgage brokers should be preparing for now?

DJ: Brokers should prepare for more scrutiny, not less. The FCA promotes a risk-based approach, but expects this to be thorough, evidenced, and auditable – not a tick-box exercise. Increasingly, the regulator supports the use of secure digital IDV solutions over manual processes, recognising that real-time, reliable verification reduces fraud risk and improves compliance.

Ultimately, firms must be able to clearly demonstrate they know who their clients are, understand their financial position, and have taken appropriate steps to mitigate financial crime risk.

The direction of travel is towards stronger evidence, better data, clearer audit trails and more proactive monitoring. Firms that modernise now will be in a stronger position commercially and operationally. Those relying on manual, fragmented processes will find it harder to keep pace.