As regulatory expectations continue to place greater emphasis on evidence, consistency, and risk-based decision making, law firms need to look beyond individual compliance checks. From identity verification and AML screening to source of funds and source of wealth, risk assessments, and ongoing monitoring; It’s all part of one compliance process, yet many firms still manage them across separate systems and manual workflows.
For law firms, compliance is not a single task that can be completed and filed away. It is a process that begins with client onboarding and continues throughout a matter, with each stage contributing to the overall picture of risk.
Yet when ID checks, AML screening, source of funds verification, risk assessments, and reporting are managed separately, it can become harder for firms to maintain a consistent view of risk and demonstrate how decisions have been reached.
Compliance is a connected process.
A client’s identity is an important starting point, but it is only one part of understanding the risks associated with a matter.
Once a client’s identity has been established, firms need to screen them for money laundering risks, understand where transaction funds have come from, consider the wider circumstances of the matter and assess whether any additional due diligence is required.
The information gathered throughout this process is connected. AML results will influence an initial Risk Assessment, information gathered on Source of Funds and Source of Wealth will provide further context around a transaction, and future changes in a client’s circumstances will mean that previous assessments need to be revisited and updated.
Treating each requirement as a separate task makes it more difficult to see these connections and keep an accurate, complete record of how everything is being assessed and managed throughout the course of a transaction.
The challenge of disconnected processes.
For firms relying on multiple systems, emails, spreadsheets and manual processes, information can quickly become fragmented.
Teams may have to enter the same information more than once, move documents between systems or manually bring together the results of different checks before completing a Risk Assessment. This not only creates additional admin but makes it harder to maintain consistency across matters.
It can also make reporting and audit preparation more difficult. Firms need to be able to demonstrate not simply that checks were carried out, but what information was considered, how it was analysed, the conclusions drawn from it, when decisions were made and how risks were managed.
A connected approach helps to bring this information together.
Bringing the compliance journey together.
InfoTrack’s Electronic Client Onboarding Solution (eCOS) is designed to help law firms manage client onboarding and compliance as one connected process.
The solution brings together digital identity verification, AML screening, Source of Funds and Source of Wealth checks, Company AML, Client Matter Risk Assessments (CMRA), and digital document signing within the same onboarding journey.
Rather than treating each requirement as a standalone process, information collected during onboarding can be used to support the checks and assessments that follow. For example, information gathered through identity verification can be used for AML screening, while information from ID, AML, and Source of Funds checks can feed into the CMRA.
This helps reduce the need for firms to repeatedly collect or re-enter the same information and provides a more consistent approach to managing compliance across matters.
From checks to a clearer view of risk.
A connected compliance process can also help firms move beyond simply completing individual checks towards developing a clearer view of the risks associated with each matter.
Through eCOS, higher-risk matters can be identified for further review, with compliance teams able to see onboarding progress, outstanding checks, matters requiring attention and risk information through live and interactive compliance dashboards. Out-of-the-box reports allow firms to keep across risks identified during the ID and AML check process, while bespoke reporting can also be set up to provide compliance leaders with greater visibility of any potential risks and ensure they are highlighted at the earliest possible stage.
The process also creates an audit trail on the face of the file, helping firms evidence the checks undertaken, results received and decisions made throughout the matter.
This is increasingly important as regulatory expectations continue to focus on how firms identify and manage risk, rather than simply whether individual checks have been completed.
Consistency matters.
Every client and matter is different, but the process used to assess and manage compliance shouldn’t have to be.
A consistent approach helps firms ensure that the same core requirements are considered across matters, while still allowing risk-based decisions to be made where circumstances require additional scrutiny.
Technology cannot replace professional judgement or a firm’s responsibility for its own compliance processes. However, it can help provide the structure, information and visibility needed to support those decisions.
For law firms, the future of compliance is unlikely to be about adding another check to an already long list of requirements. It is about understanding how those requirements connect.
By bringing identity verification, AML, source of funds, risk assessment and reporting together, firms can create a clearer compliance journey that is easier to manage, easier to evidence and more consistent across the business.
Compliance isn’t one check. It is a connected process and the technology supporting it needs to reflect that.
This article was submitted by Perfect Portal 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.
