Posted by Yazad Bajina, director at Legal Futures Associate Checkboard
Bajina: Technology is the way out
There’s been a lot of noise about incoming changes to anti-money laundering (AML) rules for the regulated sectors, including the law. The government says it wants to reduce the burden on small firms and make them more proportionate to the scale of the threat.
It’s true that AML rules are extremely strict. Many firms have faced large five- and even six-figure fines for compliance slip-ups, and the government believes it’s stifling the sector’s growth.
Something that gets forgotten among all this noise is the impact onerous AML rules have on client experience. The burden of extensive identity verification and AML checks invariably falls on the clients; it’s a source of friction and it reduces trust and confidence.
But simpler, clearer regulations should allow us to shift the conversation away from the compliance burden and instead towards using AML checks to improve the client experience.
That’s because AML isn’t just about managing risk. And if firms can make the process as smooth and seamless as possible, an effective AML process can signal a reliable and trustworthy firm.
Changing client expectations
Clients increasingly expect a streamlined, efficient and transparent experience when engaging with a law firm. They don’t want their onboarding to get bogged down by compliance.
But if regulatory demands are too burdensome, client experience can often fall by the wayside.
The government’s new plans for AML give law firms a fantastic opportunity to remove this source of friction and create a better experience for their clients. Slow, laborious background screening can give away to AML checks and identity verification embedded throughout the onboarding process.
Is technology the answer?
One of the easiest ways to do this is through technology. The government seems to feel the same way, promising support for adoption and upskilling within the sector.
Technology can have an immediate impact on growth, performance and efficiency, but it also future-proofs firms against regulations as they evolve. This means that, when the government finally releases its new guidance, firms will already have the tools to meet the requirements.
On the client experience side, technology can also serve as a tool for streamlining and expediting the verification and onboarding process.
By leveraging automated identity verification tools, onboarding is no longer a slow, manual and time-consuming, but fast and user-friendly. Clients can simply submit identification documents and complete AML checks as part of the signing-up process.
These can be cross-checked against electoral role data, credit records and biometric data, completing the checks in minutes rather than days.
Striking the balance
In a sector that often relies on reputation and referrals to win new business, confidence is key.
Any firm that fails to meet its AML obligations will suffer serious reputational – as well as legal – damage. And as the government looks to ease the AML rules, firms will quickly find there are fewer excuses when they fail to meet those standards.
Technology is the way out. It prevents delays, improves client confidence and makes it easier to gather the information firms need to produce accurate compliance reports.
Moreover, the best platforms mean the compliance burden is no longer placed on your clients – in fact, there’s no burden at all.
A firm that provides a smooth, frictionless experience that also meets its regulatory obligations is more likely to win the trust of its clients.
It’s on law firms to get the balance right.
Leave a Comment