using AML technology to gain competitive advantage in professional services

by | Apr 2, 2019 | All Blog Posts, Featured, Top Feature

Law firms and other professional services are finding themselves under increasing pressure to offer better services to their clients at a lower price.

Client expectations are high and competition is strong as businesses compete globally. On top of this, the professional services sector in the UK has been identified as having significant weaknesses in relation to money laundering, meaning regulators are ready to step up supervision and enforcement to ensure that the growing problem of financial crime is managed with robust Client Intake and Know Your Client (KYC) processes. A firm that is able to bring on clients quickly without compromising on the quality of information will be at the front of the marketplace.

Anti-Money Laundering (AML) technology can give firms a strategic advantage by providing compliance teams with three major benefits in relation to their client due diligence process.

a better client onboarding process

Client and matter inception is one of the most important times in any business relationship; but how good an experience is it from a client’s perspective? Delays and mistakes made here will be hard to rectify further along the line, and a quick and efficient onboarding experience will strengthen client relationships.

Firms made many changes following the KYC requirements set out under regulations including MLR2017, but how have they impacted client intake?

In some professional services firms, the process is still manual with slow completion times, whereas in others we see significant differences in the experience between clients. At law firms, for example, we still see senior partners involved in the onboarding process, at a significant cost. Customers now expect fast turnaround times as well as a good client experience. But how many professional services firms can say that this is the case in their business and, if so, at what cost?

For firms who have put in place legal design thinking to support change, they know the key to better client intake is to put the human experience at the very centre. AML technology helps this by reducing the time it takes to onboard a client. It encourages a better AML workflow by supporting processes such as electronic identity checks and a standardised experience for all clients. By reducing the amount of billable hours spent on KYC checks, it also frees compliance teams or partners to do other valuable work.

more thorough KYC checks

In the wake of the unprecedented data leak of the Panama Papers, significant changes were made to the AML regimes for multiple professional services industries. New guidelines were laid out under MLR2017 for both law firms and accountancy firms, and tougher KYC requirements have been in place since then. Firms have been expected to delve deeper into a client’s beneficial ownership structure.

For firms not using AML technology, this has been a time-consuming and costly exercise. The process of identifying ultimate beneficial ownership globally is challenging as multiple data sources need to be accessed. For firms using manual systems, it is easy to make mistakes when dealing with complicated corporate structures that are difficult to visualise.

Intelligent process automation streamlines the process, checking global data and producing corporate ownership charts that are easy to action. By reducing the time it takes to conduct these checks from hours down to minutes, firms are able to onboard clients quickly without compromising regulatory standards.

Another aspect of the updated regulatory regime that firms struggle with is the need to conduct KYC checks on an ongoing basis. Firms are expected to be aware of client risk at all times and need to have processes in place to manage this. The best AML technology automates KYC checks throughout the lifecycle of a client, alerting compliance teams when there has been a significant change in ownership structure.

an auditable process

The UK government has made it clear that professional services firms will be under the microscope as it tackles the ever-growing problem of money laundering. Firms need to be prepared to prove that the policies they have established are being adhered to across their business irrespective of who is conducting the client due diligence process.

Having a clear and verifiable audit trail in place gives compliance officers confidence in the event they are questioned by regulators. Using AML technology is the quickest way to produce a dynamic audit trail that will stand up under scrutiny.

An audit history can also be used by professional service firms to examine where the AML workflow is working well or it needs to be improved. Having this information available quickly is a powerful tool for compliance teams who want to improve client intake.

encompass is the next generation KYC automation software for professional services firms. By standardising and accelerating client onboarding, firms are able to streamline their KYC processes. Contact us to find out more about how we can help you gain a competitive advantage.

about encompass

Founded in 2012 by entrepreneurs Roger Carson and Wayne Johnson, and operating from the UK, encompass is the creator of unique, innovative Know Your Customer (KYC) software for banking, finance, legal and accountancy that enable better, faster commercial decisions. The company is driven by the belief that the best decisions are made when people understand the full picture.

want to turn regulatory compliance
in to a competitive advantage?

Contact us today to arrange your personalised consultation of encompass. Discover how our KYC automation software can help your business accelerate onboarding and give you peace of mind that you are regulator ready.

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