Verifying a client’s identity is an essential first step, but it only provides part of the picture when it comes to understanding client and matter risk. As compliance expectations continue to evolve, law firms need to bring together ID Verification, AML screening, Source of Funds and Source of Wealth checks, and Risk Assessments to build a clearer picture of the client and the transaction.
Identity Verification provides an important foundation for the client onboarding process. It establishes that a client is who they say they are, helping firms meet their obligations and reduce the risk of identity-related fraud.
But knowing who a client is doesn’t, on its own, tell a firm everything it needs to know.
A client may be genuine, for example, but could still present other risks that need to be considered. This is where the wider compliance process comes into play.
Looking beyond identity
Once a client’s identity has been established, AML screening can help firms identify potential financial risks, including links to Politically Exposed Persons (PEPs), Sanctions, Adverse Media, and Watchlists.
These checks can provide important information about the client, but they are just one part of the overall picture.
Understanding where money has come from is another important consideration. Source of Funds checks can help firms establish how the money being used in a transaction was obtained, whether that is through savings, a property sale, an inheritance, a gift, or another source.
In some circumstances, firms may also need to understand a client’s wider Source of Wealth – how they have accumulated their wealth over time.
Together, these checks give firms more information to consider than an identity check alone.
Bringing the information together
The value comes not just from carrying out each check, but from considering the information collectively.
A result from an AML screening check may raise a question that needs further investigation. Source of Funds information may provide additional context around a transaction. The nature of the client, the transaction, or the parties involved may introduce further risk factors.
This information can then feed into the wider Risk Assessment of the matter, helping firms determine whether further due diligence or escalation is appropriate.
For law firms, this means compliance shouldn’t be viewed as a series of isolated checks. Each stage contributes to the overall understanding of client and matter risk.
Risk Assessments need the full picture
A Client Matter Risk Assessment (CMRA) provides the opportunity for firms to bring this information together and formally consider the risks associated with a matter.
Rather than relying on a single result, firms can consider information from ID Verification, AML screening, Source of Funds and Source of Wealth checks, alongside the circumstances of the client and transaction.
This supports a more informed, risk-based approach, and gives firms a record of the considerations and conclusions reached.
It also highlights why consistency matters. If information is held across different systems or gathered through separate manual processes, it can be harder for teams to bring everything together and apply the same approach across matters.
A connected approach to compliance
InfoTrack’s Electronic Client Onboarding Solution (eCOS) is designed to help firms connect these stages of the onboarding and compliance process.
The solution brings together Verification of Identity, personal and Company AML checks, Source of Funds and Source of Wealth information, and Client Matter Risk Assessments within one digital journey.
Information gathered during the onboarding process can be carried forward into later checks and assessments, reducing the need for teams to repeatedly collect or re-enter the same information.
This also provides greater visibility of the compliance process, with dashboards and reporting helping firms keep track of onboarding progress, outstanding checks, and matters requiring further review.
From knowing who the client is to understanding the risk
Effective compliance requires more than confirming a client’s identity. Firms need to consider the wider information available to them, and understand what it means in the context of the client and matter.
By bringing ID, AML, Source of Funds, and Risk Assessment together, firms can move from simply verifying who a client is to building a clearer picture of the risks that may need to be considered.
For law firms, the goal is not to add more disconnected checks to the onboarding process. It is to make sure the information gathered through those checks can work together to support informed decisions, consistent processes, and a clear record of how risk has been assessed.
eCOS by InfoTrack
eCOS is a complete client onboarding and compliance platform for law firms. Bringing ID Verification, AML, Source of Funds and Wealth, Risk Assessments, eSignatures, and Payments into one connected journey. eCOS helps firms simplify processes, strengthen compliance and deliver a smoother client experience.
This article was submitted by eCOS by InfoTrack as part of an advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the advertiser and not those of Today’s Conveyancer.
