When your accounting firm embarks on the journey of taking on new clients, the significance of Customer Due Diligence (CDD) and Anti-Money Laundering (AML) checks can’t be overstated.
These checks are your first line of defence against fighting potential money laundering or illicit activities. Get it wrong and you could harm your firm, your brand, and the trust of your existing clients. Having robust KYC processes, that include running AML checks, are a foundational part of your client onboarding and due diligence process. They aren’t just a good idea; they’re an absolutely vital and legally required part of your firm's processes and policies.
AML checks help you ensure that the onboarded client is who they claim to be, and that they’re running a legitimate business and financial model. What can you do to make these onboarding checks easier, quicker and more accurate?
In this blog post we’ll explain:
- The five key challenges when running onboarding checks
- How to streamline and strengthen your onboarding checks
- How Firmcheck helps you manage AML across the entire client lifecycle
The five key challenges when running onboarding checks
In the current financial landscape, it’s important for you to be aware of the increasingly sophisticated nature of financial crimes, the regulatory need for carrying out due diligence and the potential brand and trust impacts of the firm being non-compliant.
But what are the main challenges that make onboarding checks such a tricky and time-consuming task for your team?
We’ve highlighted five of the main hurdles to smooth onboarding checks:
- Regulatory compliance – navigating the complex and evolving UK AML regulations, while also staying updated with any changes, can be a constant challenge. It’s a full-time job to keep on top of the regulatory framework and to apply it well.
- Data collection – getting accurate and comprehensive information from your new client can be tough. This can be due to the client’s limited understanding of the requirements, poor systems or a reluctance on their part to share sensitive data and documents.
- Risk assessment – carrying out an assessment of a new client's risk level for money laundering or financial crime is a delicate business. You don’t want to endanger the client relationship, but you also need to make 100% sure that they are legitimate and legal.
- Client verification – making sure the company details, documents and identities provided by the client are genuine is complex. Whether you’re using paper forms or digital onboarding, the verification process needs to be robust and highly accurate.
- Resource allocation – setting aside enough time and resources to run through the key due diligence tasks can delay the onboarding of your new client. If issues appear, then these AML problems can affect the quality of service the firm can offer.
How to streamline and strengthen your onboarding checks
Getting the balance right between tough Customer Due Diligence (CDD) and a simple onboarding process is hard. But there are ways to make your onboarding checks easier, more accurate and less stressful for both the new client and your firm.
Let’s take a look at some of the ways to overcome the main challenges:
- Switch to a digital process for data collection – use secure online tools or shared portals as a secure and fast way to request and store client data submissions. Going digital simplifies the collection process, minimises errors and arguably keeps things more secure if you are using a trusted provider with strong security credentials.
- Take a digital approach to risk – software is getting better and better at running data analytics to assess your new client’s risk profile. For example, most biometric software uses OCR technology which validates the authenticity of identity documents and extracts personal details from the provided ID. It’s fast, accurate and automated.
- Use software integrations to verify documents – using specific AML checking solutions and data integrations helps you verify client documents, identities and public information more easily. Faster checking means a more seamless and efficient onboarding process.
- Make better use of technology – instead of weighing down your Money Laundering Reporting Officer (MLRO) with manual tasks, use specialised tools to track and monitor clients on an ongoing basis.
For many firms, the onboarding process, especially with respect to due diligence, can be either a time-intensive manual process or a task that’s carried out by multiple legacy software systems. With the advances in cloud technology, digital systems and software automation, there’s no need for client onboarding to be a pain.
How Firmcheck manages AML across the entire client lifecycle
Firmcheck is an AML compliance software that helps to make the client onboarding process easy, from ID checks to assessing risk as part of due diligence.
We help you comply with your AML obligations as an accounting firm, with features that offer biometric ID verification, sanctions screening, PEP screening and identification of beneficial ownership within a company structure via our Companies House integration (to name a few).
As a hub for your client onboarding (and ongoing) checks, you get:
- Comprehensive company data, pulled from our direct integration with Companies House. This gives you instant access to company information, making it easier for you to understand PSCs and who you need to carry out due diligence on.
- Biometric verification, which is easily accessed via a web app on a mobile device and can be completed anywhere, anytime. New clients can verify their ID and address via a mobile web app that provides a seamless experience, including live selfie ID.
- Effortless risk assessment, through a streamlined assessment of the client’s profile. Firmcheck is designed to help you make an informed risk assessment with pre-set risk questions and independent sections so you can add additional documents like the source of wealth for better, more comprehensive decision-making and risk profiling.
See it for yourself - get a taste of how AML checks work in Firmcheck when onboarding a new client ⬇️
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If you’re looking for an onboarding solution that ticks all the AML and CDD boxes, we think you’ll love Firmcheck.
(NB: This article doesn't constitute legal advice and is intended for general informational purposes only. Always consult with a legal expert or compliance consultant for guidance specific to your firm.)