By Legal Futures Associate Checkboard [1]
AML regulation may have changed hands, but law firms face the same old obligations and challenges.
Money laundering is still a major ongoing concern for the UK government, and the legal profession still must abide by the same old Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
Firms have a continuing duty to conduct AML and source of funds checks [2] to ensure any dealings aren’t being used to disguise criminal behaviour, enable money laundering, or give dodgy characters legal legitimacy.
On the one hand, this helps protect the wider UK economy, but on the other it reduces the risk to firms themselves. Enabling money laundering is a reputation killer, but it can also lead to financial losses and regulatory penalties.
So, solicitors must be able to demonstrate to the FCA they have performed the required checks for every individual they serve.
Except, as many firms know well, AML checks often produce an extremely high rate of false positives.
Reducing false positives
False positives have always been a big problem for law firms. When performing AML checks, many systems raise red flags for very minor inconsistencies or confuse similarly-named people for one another.
The result? Lost business and missed opportunities.
Checkboard’s solution is to work closely with reliable third-party providers to ensure our AML checks are as accurate as possible. One of these providers is LexisNexis, one of the most trusted names in AML.
We have also developed our own custom algorithm to reduce false positives. We assign a percentage match rate to each case, with any individual crossing that threshold flagged as a risk. Since legitimate clients are unlikely to pass that figure, they will not be identified as a threat, significantly reducing the false positive rate.
But compliance isn’t just about ticking the AML box at the start of a relationship. It’s an ongoing process that lasts for the entire client lifecycle, and while you may have identified the immediate risks at the onboarding stage, new ones can still arise at any time.
Firms, therefore, need to be proactive and conscientious, performing ongoing monitoring to spot any potential red flags over the course of the relationship.
Checkboard ensures you’re doing your due diligence across the entire transaction. We help you conduct ongoing monitoring, by performing scans of PEPs, sanctions, mortality, and adverse media lists every day for a 12-month period.
This keeps you compliant and risk-free for longer.
Say goodbye to compliance challenges
Checkboard helps eliminate those old compliance challenges.
Our custom algorithm significantly reduces false positives, and our all-in-one solution for checks and verification means you can perform all the necessary checks both at the start of a relationship and over the following 12 months.
It keeps the regulators happy, reduces the risk of fines and legal action, and protects your business and other clients from criminal risk and fraud.
You can comply with the regulations, while ensuring business runs smoothly, swiftly, and efficiently, giving your team more time to build relationships and close cases.
Discover smoother onboarding with Checkboard. [3]