Insight

Why Reliable Mortality Data is Critical for Compliance in Regulated Markets

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Compliance in regulated markets is not optional. In financial services, insurance, utilities, or regulatory technology, organisations must comply with high standards to protect consumers, prevent fraud, and maintain operational integrity. Having access to reliable mortality data is one such significant yet often overlooked compliance consideration. Without it, firms may risk regulatory breaches, financial penalties, reputational damage, and even litigation.

Published by: MiExact Marketing | 6 March 2025

The Role of Mortality Data in Compliance and KYC Processes


It is necessary for organisations within regulated sectors to have precise mortality data to ensure they are not communicating with deceased customers or misusing customer information. This is a key compliance and KYC consideration required across a number of major industries:

Financial Services & Banking

The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (UK AML Regulations) require firms to conduct due diligence, including verifying if an individual is deceased before opening accounts or providing financial services. Banks must prevent fraud related to late account holders and make the correct payments under pension arrangements. Incorrect records can lead to overpayments, which will attract regulatory scrutiny and financial loss. Regulatory frameworks such as the Financial Conduct Authority (FCA) Consumer Duty (FCA Consumer Duty) lay down the need for accurate record-keeping and fair customer outcomes. Identity verification is also critical to prevent pension fraud and unauthorised access to deceased individuals' credit profiles.

Insurance

The Insurance Distribution Directive (IDD) (European Insurance Distribution Directive) and the FCA require insurers to verify customer details, including ensuring no fraudulent applications are made in the name of deceased individuals. Non-life and life insurers must validate claims against up-to-date mortality statistics to prevent fraud and settle authentic claims efficiently. The IDD highlights the importance of data accuracy in claims management.

Utilities & Telecoms

Operators must not distress families by taking unnecessary billing or collection activities on deceased customers. Ofcom (Ofcom Fair Treatment Guidelines) and Ofgem (Ofgem Standards of Conduct) stress the importance of treating customers fairly, including those handling deceased estates. Utilities and telecoms companies must also conduct accurate customer identity checks, including verifying mortality status, to prevent fraud and misallocated accounts.

Regulatory Tech & Compliance Businesses

Organisations specialising in compliance need robust mortality data to support anti-fraud measures, identity verification, and regulatory reporting. The UK General Data Protection Regulation (UK GDPR) (UK GDPR Compliance) mandates accurate data processing to prevent misuse and ensure lawful handling of personal data.

Potential Consequences of Inaccurate Mortality Data

Inaccurate mortality data can have significant negative consequences, including:

  • Regulatory Non-Compliance: Failure to comply with regulations such as the aforementioned FCA’s Consumer Duty can result in hefty fines, enforcement actions, and increased regulatory scrutiny. For instance, the FCA has issued multimillion-pound fines to firms failing to meet data accuracy and customer protection standards. In severe cases, businesses may face operational restrictions, loss of licenses, or legal proceedings.
  • Fraud & Financial Crime: Deceased persons' information can be used to facilitate fraudulent activities, e.g., identity theft or benefits fraud. The Proceeds of Crime Act 2002 (POCA) (Proceeds of Crime Act) enforces stringent anti-fraud measures.
  • Reputational Damage: Incorrectly contacting or attempting to recover money from the relatives of deceased individuals may result in negative publicity and loss of customer trust.
  • Operational Inefficiencies: Handling outdated records incurs administrative expense, creating unnecessary costs and inefficiencies in customer service.

The Need for Real-Time, Accurate Mortality Screening

Organisations need access to accurate mortality data to mitigate these risks. A robust mortality screening procedure guarantees that businesses are able to:

- Quickly and effectively detect deceased individuals in your database.
- Prevent fraudulent activity related to deceased client records.
- Comply with industry regulations.
- Improve operational efficiency by automating updates to customer information.

How MiExact Mortality Data Helps

MiExact provides highly accurate and up-to-date mortality data to help organisations within regulated sectors maintain compliance. By leveraging comprehensive data sources and advanced verification processes, we help businesses to:

  • Reduce fraud risks associated with deceased identities.
  • Avoid sending unnecessary and potentially distressing communications to the bereaved.
  • Improve data hygiene and operational efficiency.
  • Meet regulatory requirements with confidence.

 

Drive Compliance with Accurate Mortality Data

Rules on data accuracy, anti-fraud controls, and consumer protection are likely to become even more stringent. Organisations have an active duty to ensure their customer records are up-to-date and compliant. Investing in accurate mortality data also ensures business integrity, consumer trust, and long-term resilience.

To optimise your compliance and KYC processes, request a free MiExact data audit today. 

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