Meeting compliance regulations with digital verifications

Remote and automated anti-money laundering checks (AML) and biometric ID verifications (eIDV) become more critical and challenging as legal transactions move online. Identifying and onboarding your clients, checking PEPs and sanctions lists, verifying their addresses, and automatically validating their source of funds helps you protect against fraud and comply with Solicitors Regulation Authority’s and HM Land Registry’s Safe Harbour Digital ID standards and regulations. In some countries, a digital agreement is not legally enforceable without being tied to a strong identification process.

In heavily regulated sectors, like the legal profession in England & Wales, the need for automated ID verification and effective client onboarding is more common. The Solicitors Regulation Authority, The Law Society’s Lexcel and Conveyancing Quality Scheme (CQS), Her Majesty’s Land Registry’s Safe Harbour Digital ID regulations and standards clearly define the AML and ID checks and processes which are critical to assessing client risk, and it’s a legal requirement to comply with these Anti-Money Laundering laws. Meeting compliance regulations like the Law Society’s Enhanced Client Due Diligence (CDD/EDD) and Know Your Customer (KYC), which require regulated law firms to collect, verify and store individual IDs and undertake a range of verifications and checks is a vital aspect of an effective onboarding solution.

What are the problems with manual client onboarding?

Using manual client onboarding and AML/ID checking can cause problems for lawyers when trying to adhere to regulations like these and expose solicitors’ firms to risk. The manual ID checking process usually involves many steps, including physically verifying the ID, running AML checks, validating the addresses, confirming their source of funds and screening against the government’s PEPs and sanctions lists.

Last year, there were £1.32bn worth of fines issued in the United Kingdom and the European Union to financial and legal sector organisations for non-compliance with the majority being issued by the UK’s Financial Conduct Authority (FCA) and the Solicitors Regulation Authority.

The manual process can also be negative for clients. Clients can find it an inconvenience to take manual documents in-person to a office and wait while their data is collected. They are increasingly accustomed to the on-demand convenience provided by digital-first companies like Uber and Amazon. It can slow or delay important processes like purchasing a property or attending a court hearing.

In a Lawtech 365 survey, over 90% of law firm clients said they did not have a good KYC verification and onboarding experience, and a further 30% went on to change their lawyer in the future.

How can law firms simplify remote client onboarding compliance?

For many law firms, the ability to accurately execute remote AML checks and ID verifications in a timely manner is essential for the practice to function, allowing them to make contractual agreements, comply with regulations, and deliver legal services to clients. Automated AML and ID verifications are essential for business growth. Digital AML platforms provide better experiences and in a compliant manner.

Digitisation of the process drives significant efficiencies as manual processes are causing negative experiences and increased risk.

So how can lawyers approach remote identity verifications? Fortunately, there is a solution, a fully digital and automated ID and AML verification platform that allows you to automate ID verification for photo and electronic ID, source of funds, PEPs and sanctions and address validation.

Transforming your digital client onboarding process

Digitising the onboarding process reduces risk, increases trust, and supports legal validity and compliance. A client can verify their identity quickly and easily with a passport, drivers’ licence, or national identity card. The user can simply use a mobile device to take a photo of their documents. What’s more, using remote identity verification ensures agreements are legally enforceable and compliant with preferred regional identification processes.

Verify 365 AML & ID Verification Platform

Verify 365 are an award-winning AML and ID verification platform that provides automated anti-money laundering and NFC-based ID technology in one easy-to-use software app. Verify 365 makes the client onboarding process more streamlined, efficient and compliant.

The platform includes the following technology blocks:

Biometric & NFC ID Verification: instant verification of the client and their ID document using the latest biometric and NFC-chip reader technology using Verify 365 app. Verify 365 supports over 10,000 government issued IDs from over 195 countries. Our global reach allows you to verify your clients from all corners of the world. Verify 365 offers highly automated biometric verification to make this quick and simple, so you always know your clients.

Digital Bank Statements through Online Banking technology: providing lawyers with the financial and risk profile information, including instant digital bank statements directly from the bank. Verify 365 will verify source of funds securely and easily through our FCA-regulated Open Banking technology. Our Account Information Service (AIS) extracts individual or company transactions and balance data from multiple accounts, using bank-side authentication and consent processes.

AML Enhanced Source of Funds Checks: allowing the client to provide detailed information and a breakdown of where the funds have come from, along with supporting evidence.

AML Global PEPs & Sanctions and Adverse Media Checks: verification and confirmation that a client isn’t included on any international PEP or Sanction lists, including global adverse media checks.

Address Verification: validating the client’s address automatically through the app with proof of address upload and verification against 20+ global address databases.

Know Your Business (KYB) Verification: instant verification of the business or company, including the accounts, shareholders, persons with significant control, ultimate owners, etc.

With the new NFC-chip reader verification technology, Verify 365 can verify a person’s identity document in a matter of seconds. Not only does this make the mobile verification flows more convenient, but NFC verification is also a much more secure method of data validation and compliant with HM Land Registry’s Safe Harbour Digital ID Standard and the Solicitors Regulation Agency’s AML framework.

Verify 365 identity verification and client onboarding platform is the only solution in the world which was developed by lawyers for lawyers. The platform does not place unnecessary obstacles between your clients and the technology. You can leave the client onboarding process to them and focus on doing what you do best – being a lawyer.

As a way of background to the Safe Harbour ID standard, last year Her Majesty’s Land Registry in the UK published its first digital identity standard practice guide 81 (PG81), which recommended the use of biometrics to verify clients and provided guidelines to verify clients’ digital identity for property transactions. While PG81 is not a mandatory standard, it provides conveyancers with “Safe Harbour” protection. In other words, if lawyers prove they have used a technology platform such as Verify 365 and followed the AML guidelines for verifying their clients, the Land Registry will not seek legal action against them even if the clients are found guilty of identity fraud.

Verify 365 were the first digital ID verification platform in the world to meet the new Safe Harbour standard, providing an app for biometric NFC-based digital verification on all devices that support NFC-chip reading. The app speeds up the verification process, it’s user friendly and makes the verification more secure than photo-based verification.

While Verify 365 verification flows look simple, most of the work happens behind the scenes. Browser and device analytics, background video checks and other data cross-checking methods run in the background to maximise accuracy, ensuring you stay fully compliant with the SRA and HM Land Registry digital verification and AML standards.

For many law firms, the ability to accurately verify ID in a timely manner is essential for their practice to function, allowing them to make contractual agreements, comply with regulations, and deliver services to clients.

Ready to transform your digital ID verification and client onboarding process?

Get in touch with the team at Verify 365.