Electronic Verification: Effective And Efficient AML Process

Todays Conveyancer

2 December 2020

The benefits of electronic verification and the ways legal technology can protect law firms and their clients.

Why does the directive suggest electronic verification solutions could help defend against money laundering?
It’s well known that criminals target law firms with lax or no identity and source of funds verification for the purposes of laundering money. Electronic verification enables firms to more effectively and efficiently verify their client’s identity and expose other material issues, such as if their client is a politically exposed person. This is because it relies on multiple sources to verify an identity, as opposed to limited documentary evidence, and can spot fake or forged documents to a higher degree of accuracy than the untrained human eye.

Electronic verification not only equips firms to identify individuals who are posing as somebody else or who might have a criminal or suspicious background, it also acts as a deterrent against money launderers targeting firms perceived as “easy targets.”

What benefits will electronic verification technology offer law firms?
Defending against money laundering is one obvious and very important benefit of electronic verification, but the benefits go well beyond that. Electronic verification makes it easier for a firm to evidence its controls on a consistent basis, which is particularly important given the level of scrutiny the SRA and CLC will apply to firms in 2020.

Electronic verification also enables firms to onboard clients more quickly and efficiently, providing a competitive edge against less tech-enabled firms, freeing up fee earner time to focus on fee earning and providing greater customer care, and freeing up compliance staff to investigate areas of more genuine suspicion and risk.

Traditionally, ID and source of funds checks have been ineffective, time consuming and inconvenient for firms and clients alike, but no more.

What are the dangers of traditional paper identification processes?
Thanks to the internet, fraudsters and money launderers have become increasingly sophisticated in their efforts to deceive law firms. High quality fake identity documents, such as passports, drivers’ licences, utility bills and bank statements, can now easily be purchased online by anyone.

How is Advantage Consulting helping law firms improve their enhanced due diligence when it comes to AML?
Our Legal Technology experts work with law firms to implement LawTech that can quickly and easily verify that their clients actually are who they say they by using state of the art document scanning and facial recognition technology.

It also enables firms to retrieve comprehensive source of funds information digitally, including verified bank statement information, and conduct comprehensive checks on giftors at the click of a button.

The result is less time on compliance and greater peace of mind for Managing Partners and Directors that their processes are robust and firms are safe from money launderers.


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