With us all slowly coming back to a sense of reality having had the chance to escape work and professional obligations thanks to Christmas and New Year, you might now start looking closely at your practice and thinking to yourself. How do we make 2022 “our” year? How do we push it further than we ever have before and what can be done to make the whole process of working with us easier? Well with contracts for existing AML processes coming to an end or coming close, an ideal new solution to be looking at would be a new anti-money laundering solution. Why? Because most solutions currently used are cumbersome, old, difficult to use for both you and your clients and in some cases, not fit for purposes in the legal industry.
With this in mind, here are four things to look out for in a new legal anti-money laundering system.
1) The Use of AI for identity verification
Many existing systems claim to verify clients but what most don’t realise is that most current AML solutions don’t do much in actually verifying clients. The Verify 365 team has extensively written and talked about how many web-based systems don’t verify the client. Why? Well simply put when you ask your client to send you a copy of their ID how do you know it’s them? How do you know it isn’t a look alike? Or the document hasn’t been tampered in some way? The point being that most web-based solutions only truly check that the document number is legitimate but everything outside of that isn’t checked and verified.
That is why the use of AI in the form of biometric technology and document fraudulency technology is important. Systems like Verify 365 uses biometric technology to compare the image in/on the document the client provides against the client themselves, this way we can establish that the two are the same. Along with this, through our use of AI, systems like ours are able to establish ownership of the document and legitimacy of it to ensure that not only is the individual really your client, but the document is real and belong to them.
So, if you’re in the market for a new AML solution, make sure the first thing you look at is the use of emerging AI technology.
2) Data Analytics
Data is important, especially when trying to identify a client’s identity and finances. Many businesses across the world are trying to become data driven so generally speaking, the more data the better when trying to establish validity and not. But data on its own, especially raw data, is useless if you don’t have time to read it or if you and your team don’t understand it. However data which is used to draw conclusions from and used to gain insightful correlations is highly valuable. Not only does this make it a lot quicker to draw conclusions and verify identities and finances. But it also lessens the burden of needing to train staff in understanding raw data.
That is why systems like Verify 365 have made it easy for lawyers to draw conclusions easily when it comes to finances. From pulling in the financial data from clients and organising it into clear and concise tables. AML solutions like our use data analytics to enhance our solution and make the ease of using it easy for all. So, if your system doesn’t rely on data then you’ve got a big problem. But if it does and it doesn’t do much more than provide you the raw data. Then you need to look at an alternative which provides you and your team more insight.
3) Source of Wealth
Source of funds, we all know of it, we know what it means, and we all have our own way of collecting the information from our clients. For conveyancers’ source of funds is paramount for their matter to ensure funds and their sources are clear and ensuring the right documents can be collected. However, what many omit is source of wealth and granted many compliance managers are waking up to the need of this proof.
Source of wealth goes further than just finding out where the finances are coming from. It instead focuses on how the money was built up. Did the £50,000 in the current account come from a side business or salary. That £300 payment a month that keeps coming into the account, what is this and where is it coming from. Why is this important though? Well like most things in this article, it’s important for AML purposes. Knowing that £50,000 is coming from savings doesn’t mean that money is legitimate, however knowing that it was saved up over a number of years through their salary does mean that it is more likely to be legitimate or not. That is why systems like Verify 365 use our open banking information to categorise payments ensuring we can see where payments are coming from allowing us to legitimise client’s money without needing to ask intrusive questions immediately.
So, if a system only focuses on source of funds and not wealth, then know that there are cost effective systems out there that offer both.
4) Ease of Use
A ‘real’ verification, data analytics and source of wealth are all important in any anti-money laundering system. But arguably more important is the ease of use of the system. Regardless of how good the system is, if staff and clients can’t use it or find it cumbersome to use, then the system is of no use. Many AML systems fail at this final point and over time become a burden on the team that either accept a sub-par solution as a given or decide to move to another more seamless solution.
With new and exciting solutions coming out and systems like Verify 365 already being well entrenched in the market. The use of seamless web portals for lawyers and apps for clients is becoming the standard. Why? Because most people are comfortable using their phone for almost anything in their life, so why not in confirm their identity. Similarly in a world where people feel rushed and lack the patience to run through cumbersome ‘legacy’ solutions, apps allow clients to verify themselves quickly. This isn’t to say apps are the only way to create easy to use AML solutions but instead that many existing easy to use solutions are in app form because most web-based solutions are difficult to navigate and use.
Ease of use is a key component to Verify 365 because we understand the longer it takes for clients to verify themselves and go through the hoops required for compliance purposes the longer it takes to start you work and either bill for your fixed fee or start building up the WIP on the file. Secondly if you make it difficult for clients to work with yourself and your practice by making the hoops they, as the client has to jump through, then you’re less likely to get their repeat business or recommendations.
So, what conclusions can we draw from our “four
things to look out for in a new AML solution”? Well simply put, a system which
checks the clients document just simply isn’t enough. But along with this, a
system which only checks the identity of a client isn’t nearly going far enough
for an AML solution. A holistic approach that touches on identity, address,
finances and compacts then compacts this all into an easy-to-read report with analytics
should be the go to solution, and make no mistake there are systems out there
that offer this. Take us for example