Case management systems and AML compliance in conveyancing

hoowlaIn 2024, both the SRA and CLC will intensify their scrutiny of AML compliance. Firms that persist in inadequate compliance management practices are poised to face even stricter sanctions, according to the Conveyancing Association in an article released on the 2 February 2024.

It is really important for you and your firm to adopt a transparent and traceable approach to ID and AML risk management. Using screening solutions that are advanced technology not only reduces costly manual processes but also enhances your ability to assess potential risks effectively. Additionally, this technology facilitates continuous monitoring, thereby augmenting the level of security and accuracy in compliance checks.

As a firm, you already know you are required to conduct due diligence on your clients to verify their identities and assess the legitimacy of the transaction. This includes gathering information such as proof of identity, proof of address, and the source of funds being used for the property purchase.

Key components of AML regulations in conveyancing include:

  1. Customer Due Diligence (CDD): You must perform CDD on your clients to verify their identities and assess the risk of money laundering. Enhanced due diligence is required for high-risk clients or transactions.
  2. Risk Assessment: you’re required to conduct risk assessments to identify and mitigate the risks of money laundering and terrorist financing in their conveyancing activities. This involves assessing factors such as the nature of the client, the source of funds, and the complexity of the transaction.
  3. Record Keeping: You must maintain detailed records of your AML activities, including client due diligence documentation, risk assessments, and suspicious activity reports. These records must be kept for a minimum period as prescribed by regulations.
  4. Training and Awareness: You’re required to provide regular training to staff members on AML regulations and their obligations. This helps ensure that employees are aware of their responsibilities and can effectively identify and report suspicious activity.
  5. Reporting Obligations: You have a legal obligation to report any suspicions of money laundering or terrorist financing to the relevant authorities, such as the National Crime Agency (NCA). This includes filing suspicious activity reports (SARs) when you have reasonable grounds to suspect that a transaction is related to criminal activity.

How case management systems can help firms stay on top of their AML requirements.

AML App Integrations:

When looking for a new case management system. Ensure that it integrates with third-party AML verification services or apps such as Armalytix to facilitate efficient and accurate verification of client identities and sources of funds. This involves capturing and storing information about the origin of funds used for property purchases or legal transactions.

Check that your chosen platform offers tools for documenting the chain of ownership or financial transactions associated with a particular asset, helping users demonstrate compliance with AML regulations by ensuring transparency and accountability regarding the sources of funds. These integrations should allow users to send verification requests directly from the dashboard.

AML Reporting:

Check that your case management includes features for generating reports required for compliance with AML regulations. This involves automated generation of reports and questionnaires such as suspicious activity reports (SARs) and other regulatory filings mandated by authorities.

Platforms should offer customisable reporting templates or predefined report formats tailored to meet the specific requirements of AML compliance, helping you efficiently compile and submit necessary documentation to regulatory authorities.

Audit Trails:

Your case management choice should maintain detailed audit trails of customer interactions, identity verification processes, and transaction histories within the platform. This ensures that users can track and review all relevant activities for compliance purposes.

Audit trail features should include timestamped logs of user actions, changes to client records, and communication history, providing a comprehensive record of compliance-related activities that can be easily accessed and reviewed as needed.

Compliance Workflow:

Case management system AML compliance processes should offer structured workflows for staff to follow in conducting due diligence, reporting suspicious activities, and managing compliance tasks. These workflows include step-by-step procedures and automated task assignments to guide users through cases and transactions, ensuring that all necessary steps are completed accurately and efficiently. By standardising compliance workflows within the platform, the system should help you and your firm maintain consistency and accountability in AML compliance efforts, reducing the risk of errors or oversights.

If you’re ready to embrace technology but are worried about technical jargon or are unsure how software could fit within your workflow processes and keep you compliant, we encourage you to have a friendly, informal Hoowla demo with Adam Curtis.


Associate News is provided by Legal Futures Associates.
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