The Economic Crime and Corporate Transparency Bill sets out how the government proposes to achieve the reforms outlined in February 2022 by the Department for Business, Enterprise and Industrial Strategy (BEIS)’s white paper on Companies House reform. Although the UK now has a new government, the Bill closely follows many of the white paper plans, with ministers stating their intention for Companies House to be transformed from a passive library into a proactive gatekeeper.

As a major and long-anticipated reform, we can expect close parliamentary scrutiny of how far the detailed drafting of the Bill delivers the policy set out in the BEIS white paper, and furthermore how far this addresses the goal of a proactive gatekeeper for the UK’s company registry. Key questions include how far the Bill will empower the registrar with proactive powers to:

• query any information submitted to the registry
• amend and remove information from the register
• require identity verification of directors, beneficial owners, persons of significant control
• perform data analysis; share information with the public sector.
• allow data matching with both public and private sector partners.

Technologies for the short and long term

However, while we believe legislation is necessary for reform, it is arguably not sufficient. The most clear and robust legislation still needs to be implemented, and this is where the focus shifts to technology. With a focus on greater transparency, better data quality and reliability, as well as international connectedness, the opportunity for technology solutions to help transform the operation of the register is abundant.

Aside from the digital identity verification of directors already outlined in the white paper, some other considerations are:

• Automation of data validation and screening and cross-checking: this includes onboarding of structured data, full screening against known watch lists (politically exposed persons, sanctions, adverse media etc) and cross checking of documents, such as against legitimate government issued identification documents within the UK and beyond.
• Machine learning and network analytics: this includes graph data-based technologies, to continually learn from and link key characters and red flags, such as address, phone number, bank accounts, and connections to known shell companies, owners, criminal gangs etc.
• Data cleansing remediation work: to review, assess, and investigate which companies need to be scrutinised first by analysing the data we have already and remediating the existing repository to return it to a trusted data-lake state.
• Biometrics/facial recognition and digital footprint: to identify a person and verify who they are, as well as tap into the digital trail of people (digital footprint).
• Harmonise data standards for international collaboration: establishing a common set of data to be shared globally, in order that data sharing can be done so effectively. This would allow for combinations of data and patterns to emerge, data matching to occur, accompanied by a feedback loop to identify what needs to be improved and where.

Other considerations

It is widely acknowledged that technology is a key enabler to advancing the repository. Other process and operational considerations are also needed however, for this to be successful, such as:

• improvements to the overall registration process.
• higher registration fees.
• penalties for falsification, including suspension of operation and standards.
• sufficient resource considerations.

As legislation and progress continues with the reform, these items should remain top of the list to address if we are to ensure that the UK Companies House is a proactive, sustainable and reliable powerhouse of the future.

On 8 September UK Finance hosted a webinar sponsored by BAE Systems Digital Intelligence which delved into several key questions with panellist experts on the integrity of the register going forward.  These included whether it meets the standards of AML (Anti-money laundering), regulated banks, and international connectedness. It also looked at the short-term wins with technology vs. the longer-term future state that technology should play in future-proofing Companies House as a sustainable and reliable source.

If you were unable to attend the webinar you can watch it on demand now.