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UK’s Companies House ups data analytics and AI investment as new powers kick in

Companies House: its ‘Intelligence Hub’ is a visible manifestation of how the Cardiff-headquartered government agency is seeking to capitalise on its data; inset: Charlie Boundy | Credit: Companies House

The UK’s Companies House is increasing its investment in rapidly emerging fields such as data analytics and artificial intelligence (AI) as it strives to make the most of new powers to tackle fraud.

The first measures under the Economic Crime and Corporate Transparency Act come into force today (4 March), handing the agency new and enhanced powers to improve the quality of its data and tackle misuse of its companies register. It has described the new law as bringing about the ‘biggest shake-up to the service in its 180-year history’.

Changes coming into effect for Companies House include: greater powers to query information and request supporting evidence; stronger checks on company names; new rules for registered office addresses (for example, companies will not be able to use a PO Box as their registered office address); a requirement for all companies to supply a registered email address; and greater powers to challenge and remove factually inaccurate information.

The organisation, which is an executive agency of the Department for Business and Trade, is also now legally able to proactively share data with other government departments and law enforcement agencies. Previously it could only share data under limited and specific circumstances, for example because of a court order or in response to a police request.

“We have been developing the systems, processes, skills and expertise to embrace our new powers. These are being rolled out in phases from today,” Companies House chief data officer Charlie Boundy told Global Government Fintech

REGISTER NOW Companies House chief data officer Charlie Boundy is among the speakers at the Global Government Fintech Lab 2024 – our one-day event in Dublin, Ireland, on Thursday 25 April | Free to attend for public servants CLICK HERE TO REGISTER

‘Work is progressing’

An online ‘Intelligence Hub’ has already been set up as the organisation looks to make the most of the new law, which builds on the Economic Crime (Transparency and Enforcement) Act 2022.

“Our Intelligence Hub will increasingly use automation and data-driven insight to support a risk-based approach,” Boundy said today. “Over the coming year we expect to be able to automate, scale and increase the sophistication of our current trials of artificial intelligence and machine learning in identifying suspicious activity.”

“Work is now progressing to develop the infrastructure and capability needed for advanced analytics,” he added.

Companies House, which is headquartered in the Welsh capital Cardiff, also has offices in Edinburgh and Belfast, as well as a handful of staff in London. It is in the throes of expanding its staff numbers.

The Companies House annual report and accounts for 2022-2023 showed an increase in total employees from 1,129 in 2021-2022 to 1,221 (with 1,149 in the latter timespan being located in Cardiff). It is understood to be planning to recruit 60 more team members in the coming months.

Of its current staff, more than 250 are in digital and data-related roles, ranging from content design to software development.

RELATED ARTICLE UK anti-fraud legislation aims to tackle fake identities – a news story (30 October 2023) on the Economic Crime and Corporate Transparency Bill gaining Royal Assent

Version 1 on board

The arrival of its new legal powers comes just months after Companies House appointed a Dublin-headquartered company ‘to deliver a multi-million-pound digital transformation programme’.

The company, Version 1, described its appointment as representing the ‘largest technology contract let to date’ by Companies House. A competitive procurement was held through the Crown Commercial Services (CCS) ‘Digital Specialists and Programmes Framework’ (known by CCS as ‘RM6263’).  

‘As many as 70 digital and cloud specialists will support the programme through agile teams across business analysis, software development and user-centred design,’ the company said in its announcement of its appointment.

‘Version 1 will partner with Companies House to modernise systems and processes and deliver more efficient services by digitising and automating where possible or removing legacy systems, as well as delivering new systems to support legislation and improved customer interaction,’ it continued in its announcement, referencing a project timespan of an initial four years.

The Companies House business plan 2023-2024 referred to ‘continuing to improve our digital infrastructure and internal systems, including security enhancements and our use of cloud-based technology, to ensure we offer modern and reliable services’.

RELATED ARTICLE Fraud fighters: public authorities look to fuse technology with data to battle criminals – a write-up of a Global Government Fintech webinar on 7 November 2023 titled Following the money: how can data and technology combine to help governments beat fraudsters?’

SNAP into action

Other UK public sector entities have also been stepping up their investment in technology such as AI as they attempt to tackle fraud.

Global Government Fintech reported just over 12 months ago that the relatively newly created Public Sector Fraud Authority (PSFA) had awarded a contract worth more than £3.4 million to Quantexa to use ‘new data and cutting-edge technology, including AI, to find and prevent more fraud across the public sector.’

The Quantexa contract award came almost six months after the government announced details of the PSFA’s formation. The new entity is designed to house ‘counter fraud and data experts, using best-in-class tools and advanced analytics to help departments and public bodies protect public money’.

The contract award notice for Quantexa’s assignment described its remit as being the ‘provision of a Single Network Analytics Platform for cross-government/and UK banking sector use’; and that the company’s contract would run to 2 January 2026.

Companies House last year became the ‘first user’ of the Single Network Analytics Platform (SNAP), according to a government announcement on the topic of anti-fraud in November 2023. This announcement described SNAP as ‘a new artificial intelligence tool’ that had launched the same month (November 2023).

RELATED ARTICLE UK’s Public Sector Fraud Authority sets out tech-focused priorities – a news story (20 July 2023) on the Public Sector Fraud Authority’s 2023-2024 ‘delivery plan’ (one of four priority workstreams is to make better use of technology to ‘find, stop and recover’ fraud)

ID verification on the way

Other measures being introduced by the Economic Crime and Corporate Transparency Act, such as identity verification and accounts reform, are not being introduced immediately. This phased introduction will allow Companies House time to make system changes to accommodate the new requirements.

In respect of identity verification, Companies House will receive enhanced abilities to verify the identities of new and existing registered company directors, people with ‘significant control’ and those who file information on behalf of companies; remove fraudulent organisations from the company register; and share information with crime-fighting agencies.

Verification checks – which will take place directly through Companies House or via an ‘authorised corporate service provider’ (‘ACSP’) – will ‘stop criminals hiding behind false names or registering companies with fictional characters’, the government has said.

Companies House currently anticipates that verification checks will be introduced in 2025.

Secondary legislation will be required ahead of requirements coming into force.

RELATED ARTICLE UK’s Public Sector Fraud Authority turns to ‘cutting-edge’ tech – a news story (30 January 2023) on London-headquartered company Quantexa being awarded a contract by the PSFA to use ‘new data and cutting-edge technology, including AI, to find and prevent more fraud across the public sector’

New powers eagerly anticipated

The powers introduced by the Economic Crime and Corporate Transparency Act have been eagerly anticipated by public servants across government whose roles include tackling fraud.

Euan Slack, who is responsible for the development and adoption of digital tools within the UK Cabinet Office’s Government Grants Management Function, highlighted the legislation during a panel discussion at the Global Government Fintech Lab 2023, saying it should help stymie what he described as ‘still painfully easy’ fraud via this route.

As the-then economic crime and corporate transparency bill gained Royal Assent (to become the act), the executive director of regulation at the Institute of Chartered Accountants of Scotland (ICAS), Robert Mudge described the legislation as ‘crucial in enabling the registrar to keep up to date with fast-moving digital technology, protecting individual and businesses against fraud’.

The National Crime Agency (NCA) is among the further agencies standing to benefit. It has received greater powers to compel businesses to hand over information suspected to be used for money laundering or terrorist financing, with the act introducing provisions for crime-fighting authorities to seize cryptoassets more easily.

More than five million limited companies are registered in the UK, where more than 750,000 new companies are incorporated each year. Companies House says it receives more than 14 billion visits to its data register each year.

RELATED ARTICLE Protecting the public purse: tackling fraud, error and debt – a write-up of the session referred to above at the Global Government Fintech Lab 2023

Fees to rise

Companies House’s operations are financed through fees and funding from the Department for Business and Trade.

The agency is also receiving funding over a three-year period from the UK’s ‘economic crime levy’ to support its activities to help identify and tackle money laundering. The levy is an annual charge affecting organisations supervised under money-laundering regulations and whose UK revenue exceeds £10.2 million (about $12.9m) per year.

Funding through the levy has seen an investment of £20 million (about $25.4m) in Companies House and also the Insolvency Service to fund the creation of two ‘intelligence teams’ that aim ‘to improve understanding of how UK corporate structures are misused to launder the proceeds of crime and help put a stop to it’.

The money has specifically been allocated to initiatives including introducing ‘key digital systems to provide the tools to more efficiently identify and tackle criminal networks’ and ‘improving data and data science functions to identify suspicious activity more effectively’.

Companies House is increasing its fees with effect from May ‘to bring them in line with the costs of providing our services, and to recover the costs of our new powers being introduced through the Economic Crime and Corporate Transparency Act’.