A recent article in the The Law Society Gazette – the publication of record to solicitors in England and Wales – highlighted concerns raised by the Solicitors Regulation Authority over many firm’s approach to dealing with AML.
The key concern raised was that most firms are simply doing little or nothing to meet their obligations. Those that were, were often using a low quality template approach without considering specific risks posed by individual clients.
Within the UK, firms of solicitors remain highly fragmented – the vast majority of firms consist of just one or two solicitors. Compliance needs to be juggled by these partners on top of other day-to-day work meaning it is often de-prioritised and regarded as an overhead.
While tools to assist firms to perform AML checks have proliferated in recent years, they largely remain simplistic tick box affairs – checking merely for example if a customer is on a sanction or PEP list. Most importantly, most do not take a “risk based approach” at their heart meaning all customers are treated equally even when there is a qualitative difference in the risk posed by individual customers. This, aside from running counter to considered best practice, is something of a false economy. This is because treating all customers to the same low quality, onerous enhanced due diligence checks (eg checks on source of wealth and source of funds) is not typically necessary for lower risk customers.
The Idenfo KYC solution is a tool appropriate for any institution, including law firms. Our simple yet sophisticated data and risk factor model can be tailored to properly assess customer risk for solicitors, just as it can for banks, estate agents or any other institution. We provide holistic KYC coverage, providing functionality on risk rating, name screening and document verification – performing these address the concerns raised in the Law Gazette article.
Moreover, our solution is built on the latest technology – cloud based and very scaleable architecture, meaning we can offer a very flexible services for boutique law firms with no expensive IT overhead. And finally, with being a “consultancy led” rather than “technology led” organisation, our solution follows from our compliance knowledge and is then designed to be as efficient as possible rather than the other way around.