Compliance is a key, yet complex issue for the modern law firm. Today’s firms have an obligation to stay in compliance with a host of regulatory requirements, including Know Your Client and Anti-Money Laundering regulations. While compliance for law firms is a standard part of everyday operations, the processes and protocols in maintaining compliance can pose unique challenges. 

Many firms still rely on manual and time-consuming processes to onboard their clients and assess risk. Yet, this opens firms up to the risk of human error and significantly slows down the time it takes to accept new clients and start delivering service. To stay competitive in today’s market, firms ultimately need to strike the right balance between fast, efficient client intake and strong compliance policies and processes to protect their firms while providing value to clients. 

Fortunately, workflow automation provides firms with a faster, easier, and more reliable way to assess risk and onboard clients. According to the most recent Legal Briefings survey, more than 50% of law firm leaders say that process automation tools, such as business intake solutions, are amongst their top investment priorities. Streamlining the client intake process with workflow automation can not only help you better know your clients, but also deliver a more efficient client experience. 

What is Know Your Client (KYC)?

Know your Client (KYC) is a standard regulation in the legal industry that ensures legal providers have verified a client’s identity and assessed the client’s risk for money laundering activities. As part of KYC checks, firms must obtain sufficient information about the client before accepting payment or providing advice. 

In the context of anti-money laundering, KYC is the collection of client information beyond basic identity verification. The amount and type of information collected will depend on the individual client and the nature of work, however, it might include verifying the source of the client’s funding and continually monitoring the client’s financial activities. 

While there are many ways a firm can validate a client’s identity using a variety of resources, it tends to be a complex and time consuming process. That’s why more firms are turning to digital technologies to help them develop a speedy, efficient, and scalable approach to completing KYC checks.

Streamlining Risk Assessment with Legal Workflow Automation

Using workflow automation to power KYC processes improves the experience for lawyers and clients, while also providing a verified audit trail for compliance. Client onboarding and risk assessment starts by gathering the client’s information. With a forms-driven workflow approach, you can quickly and securely capture client data via web-based forms. By enabling clients to directly provide their own information, you not only improve accuracy, but also reduce the risks that arise from data duplication. 

Workflow automation can then be employed to accurately calculate risk based on your firm’s desired factors. What constitutes risk will vary from firm to firm, and platforms like Sysero enable you to build custom risk-based assessments based on your firm’s unique requirements. For example, Sysero teamed up with PSA Consulting to create a digital onboarding solution for Arntzen de Besch, which uses a built-in risk matrix to assess the risk of new clients based on a predefined set of rules determined by the firm’s priorities, including professional risk, terms alignment and GDPR compliance. 

As part of the risk assessment, an automated solution can easily identify potential risks by creating a risk profile for each new client. Low-risk clients can easily progress to the next stage of the client onboarding process, while high-risk clients are flagged and automatically routed to an escalation pathway, where risk experts can confirm the best approach forward. For example, Wikborg Rein’s digital client onboarding solution automatically routes any client or case that falls outside the firm’s risk requirements to a simplified workflow for further assessment and review. Once approved, the new client or case is automatically created in the firm’s integrated internal systems. 

The Importance of an Audit Trail

One of the most important issues with compliance is being able to tell the who, why and when for each case. To achieve this, each data change needs to be recorded. By recording the date and time of each change, any issues can be cleared up by contacting the individual who made the change.  

This is particularly important if an investigation is raised when things go wrong on a matter, especially if the authorities are involved. By maintaining a record of when data was entered, firms can prove what information they had at a specific point of time. This could be vital to proving that the correct level of checking was carried out if information comes out after the fact.

With an automatic audit trail, firms can prove to regulatory bodies that they have quality and control over their compliance procedures and avoid potential litigation and prosecution.

Improving the KYC Compliance Process with Sysero

To stay atop today’s changing regulatory landscape and client demands, a more modern approach to client intake is needed. By employing workflow automation as part of your client onboarding process, you can easily capture data and verification documentation, accurately assess risk, and get to work quicker for your clients. An automated process also provides an extra layer of compliance accountability by creating an audit trail detailing when the information was entered, which verifications were completed, who made decisions and reasons for those decisions.

As the need for KYC compliance, auditing, data security and greater efficiency continues to mount, workflow automation technology offers firms a way to transform the client onboarding process and ensure complete compliance protection. 

Ready to modernise and streamline your risk assessment? Get in touch with our team to learn more about Sysero’s automated Know Your Client solution.