Posted by Yazad Bajina, director at Legal Futures Associate Checkboard
Bajina: Client-centric design is key
Client onboarding has always been slow.
It’s not just about the paperwork and manual workflows; it’s also about those long checks and verifications you need to perform for anti-money laundering (AML) – source of funds, identity and address – before you onboard any new client.
Onboarding is also about reputation and customer experience. A slow process will put people off, and this will have a cascading effect on your future ability to retain customers. Word spreads, after all.
But innovative, disruptive industries like fintech are providing a model for the legal sector to catch up.
Fintech’s digital-first approach
Fintech, by definition digital-first, was an early innovator when it comes to customer onboarding. It has long sought to replace manual processes with end-to-end digital workflows.
Emphasising smart, efficient, user-centric processes, it has embraced highly integrated mobile interfaces with minimal friction between user and platform.
And fintech, like the legal sector, faces a raft of regulations and compliance challenges, so these platforms have been designed from the ground up to meet the industry’s stringent legal requirements.
A shared challenge
It’s a useful lesson for the legal sector, since it shares many of the same challenges when it comes to onboarding and compliance.
Both have a responsibility to identify money laundering, organised crime, and other criminal activity through AML, know your client (KYC) and source of funds checks.
Both need to prevent fraud through rigorous identity verification.
And both need to ensure trust, confidentiality and security in sensitive communications and transactions without compromising client expectations and experience.
What have fintechs done?
So, how has fintech almost eliminated manual, paper-heavy processes without compromising compliance?
Through digitalisation, fintech has actually embedded compliance as a feature of its systems. Identity and address verification, and source of funds and AML checks are now integral to its user experience.
- By emphasising user-centric design and mobile interfaces, fintechs have created minimal friction between the user and the device;
- Real-time verification using APIs, biometrics and open banking has made KYC and AML checks possible at the touch of a button; and
- By using API-enabled tools, fintechs have seamlessly integrated compliance into all of their proprietary systems.
Lessons for legal
But what lessons can the legal sector learn from this revolution?
- Adopt automation now: Client onboarding, ID verification, source of funds and other compliance checks can all be streamlined and automated for better performance and rigorous regulatory compliance;
- Focus on the client journey: Make the client experience simpler and cleaner, reducing touchpoints to the bare minimum so workflows can be completed in minutes; and
- Adopt user-centric design: Adopt digital platforms and mobile apps but ensure all your interfaces and workflows are simple and effortless to use for non-technical users.
Technology can help your firm become faster, more efficient and more streamlined, but it can also make it more adaptive and responsive to the needs of your clients.
There are promising signs the sector is already learning. According to research by the Law Society, 93% of mid-sized law firms already use AI to some extent, with more than half of them adopting it widely.
Reaping the benefits
Digitalisation can be risky. But doing nothing is too.
The longer it takes to modernise your workflows, the more danger you face from client churn, increasing inefficiency and of receiving regulatory fines – even for the most diligent teams.
Digitalisation also encourages a mindset shift in favour of smarter, faster and more efficient processes designed to put the client first.
That mindset can be competitive differentiator into the future.
Choosing the right systems, the right partners, and encouraging that change in mindset from top to bottom can reap dividends for your firm.
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