Know Your Customer (KYC) is a series of critical procedures to assess and monitor customer risk; it is also a legal requirement to comply with Anti-Money Laundering (AML) laws and Counter-Terrorism Financing (CTF). Failure to comply can result in reputational damage and significant fines, even prison sentences.
But this critically important process is still largely manual resulting in:
KYC activities often being handled by fee-earners during billable hours
Lack of control by compliance teams who are unable to demonstrate process
Poor quality or incomplete KYC exposing many firms to risk
Experienced solicitors being burdened with low-skilled tasks
Job dissatisfaction resulting in turnover of experienced staff
In March 2018 The Solicitors Regulation Authority (SRA) published a thematic review titled ''Preventing Money Laundering and Financing of Terrorism'' (the SRA review). It highlighted that a number of firms are struggling to implement compliance effectively (www.sra.org.uk/sra/how-we-work/reports/preventing-money-laundering-financing-terrorism.page).
The report noted that the government and National Crime Agency have voiced concerns that solicitors might inadvertently be enablers of money laundering, which is a perception that needs to be changed. The report also found that 78% of firms were still relying on physical documents for their customers due diligence, and recommended that electronic verification needs to be incorporated into the compliance process.
How can SmartFlow help?
SmartFlow will give you a total view of your customer in minutes, transforming your KYC compliance procedures to be 100% accurate, consistent, and providing a clear audit trail to ensure adherence to compliance procedures. It can integrate with your existing software solutions meaning you can continue business without having to make any infrastructure changes, whilst benefiting from improved efficiencies and compliance.
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