SRA Chief puts hundreds of Law firms on notice for money laundering inadequaciesOn the 20th March 2019, the SRA released a strong statement of intent to fine or remove firms who do not comply with adequate standards in the war against money laundering and fraud (https://www.sra.org.uk/sra/news/press/aml-sweep-2019.page).
The notice confirmed 400 firms would shortly be asked to demonstrate their processes from the 7,000 SRA regulated law firms.
Firms who fail would go into the regulators enforcement processes, where disciplinary action will take place.
'Many are already stepping up to that challenge, but many is not enough. Compliance is not optional.'Paul Philip SRA Chief Executive, further confirmed that in the last 5 years, 40 solicitors had been struck off or suspended from practising and the results of this assessment would be published.
What is Customer Due Diligence (CDD)CDD information comprises the facts about a customer that should enable an organisation to assess the extent to which the customer exposes it to a range of risks. These risks include money laundering and terrorist financing.
“It’s vital that client onboarding teams and customer-facing staff don’t take a ‘tick box’ approach to CDD.”Bill Howarth, Chief Executive, International Compliance Association (ICA)
Customer Service and CDD
- 1 out of 3 firms have lost customers due to inefficient onboarding (36%)
- 81% of firms believe poor data management negatively affects customer experience
- 84% of firms believe the client experience during onboarding impacts the lifetime value of the client.
CDD data requirements
- AML, Peps and sanctions checks
- Name, address, DOB, passport/driving licence and human match to document.
A complaint CDD exampleInformation you require for a client to open an account with your firm?:
- Date of birth
- passport and/or driving licence and a photograph of them.
Law firms should install a suitable software solution providing
- AML, PEPs and Sanctions
- KYC verification - confirming the identity document is real and belongs to the person from a video identity challenge test.
Contact firstname.lastname@example.org for more information, ensuring your process meets the SRA standards.
LEM Verify (in collaboration with Harold Benjamin) is nominated for various 2019 Legal Week Innovation Awards