As we head into autumn, risk assessments should be the top priority for law firms – especially their compliance teams and MLROs. Of course, there is a lot of talk around Generative AI and the super-powered platforms – but going back to the basics is what will future proof your law firm.
Unfortunately, we are seeing news of fines issued by the SRA for firms who are failing to comply with their AML requirements. However, these fines are taking a different approach than we were once used to; before, it was all around ID checks – but everyone pretty much does this now. Today, the fines are a lot more centred around the next steps – risk assessments.
Unfortunately, risk assessments are often seen as a tick box exercise and a manual laborious process that is seen as a restriction from getting on with the legal work. But they are one of the most important steps in the due diligence process for law firms. And the SRA are clamping down hard on the processes that firms follow.
At Validient, we are seeing the risk assessment process for clients and matters becoming increasingly difficult. For commercial teams, understanding the risk of the business client and the risks within the ownership structures is becoming increasingly difficult. For conveyancing firms, matter risk assessments and conducting source of funds checks are time consuming and often taking up to two hours per matter. This isn’t to say that there is a one-size-fits-all solution.
However, there are certainly ways to improve the current processes that law firms are utilising.
Let’s focus on the two examples above of commercial teams and conveyancing teams, and how utilising technology can help.
Commercial teams
With access to company data overseas becoming increasingly difficult, and with the risk of working with sanctioned individuals growing, the need to conduct effective know your business (KYB) due diligence is drastically increasing. Utilising a platform like Validient, not only can law firms now instantly see the entire corporate ownership of their client, any traces back to high-risk countries, and sanctioned individuals, entities, and assets, but they can also create and complete an entire client risk assessment utilising this data – all in one platform.
Conveyancing teams
It’s no secret that completing source of funds checks is difficult. Relying on traditional methods of asking for client information over email, and then having to sort through said information by eye is not only time consuming, but risky! Firms can now utilise open banking software that can break down transactions and use a client portal (Validient) to request additional documents from clients. All of this is centralised, the client always has a real-time list of what is needed, and the information that is uploaded can be used to create a complete matter risk assessment within the same platform.
KYB and Risk Assessments are difficult. But life is made so much easier when the right tech is invested in. If you’d like to have a no obligation chat, get in touch!
