By Legal Futures Associate Kord
By now, we’re all aware that the supervision of legal services is set to move to the Financial Conduct Authority (FCA). The transition will be gradual, but the direction is settled, and the SRA itself has signalled what it might look like: more complex, more data-heavy, and more assertive oversight than the profession is used to.
So, for firms, the change is not just a new name on the letterhead, but a shift in what’s expected of them in an increasingly regulated landscape.
A different kind of regulator
The SRA’s most recent AML report points the way. It found one-third of firms non-compliant and a further 54% only partially compliant, despite nearly doubling its proactive engagements.
Its enforcement is increasingly data-led: firms are now selected for inspection based on sector-wide data analysis, so weak or inconsistent returns put a firm on the regulator’s radar before anyone visits.
The FCA brings that approach as standard. It is a supervisor built around continuous data and evidenced controls. It expects firms to demonstrate its compliance on demand, not just produce a policy document.
The recurring theme across recent SRA findings is rarely that firms lack policies. It is that they cannot show those policies working, with risk assessments not applied to individual matters, source of funds collected but not analysed, and controls that only exist on paper.
The more data-led approach of the FCA will essentially take those gaps as evidence of non-compliance.
Evidence, not assertion
Kord brings client identity verification, source of funds analysis, and AML, PEP and sanctions screening into a single workflow, with every step recorded on one structured file.
The output is not a folder of attachments to interpret later, but an auditable record of what was checked, when, and what the firm concluded.
Identity can be verified by reading the NFC chip in a client’s passport and matching it to the live applicant.
Source of funds is evidenced through securely linked account data alongside the client’s own explanation of how the funds were accumulated.
Each produces a consistent, time-stamped trail—exactly the kind of evidence a data-led supervisor expects to see.
This ensures firms can demonstrate to the supervisor exactly how they reached a decision on a client. The evidence is assembled in an audit-ready report, with everything in one place.
Preparing now, not later
There’s still no real timeline on the transition, so firms have plenty of time to prepare. The ones who use that time well will get ahead of the game, and avoid early recriminations.
This will give them a competitive advantage over the firms still scrabbling to keep up once the new regulators are in town.
If you are reviewing how your firm will stand up to data-led supervision, Kord turns compliance from a set of policies into a record you can show.
Get in touch to find out more.
