Phil Ayton
For today’s law firms, staying compliant with regulations is an ongoing and imperative operational challenge.
One of the most critical aspects of regulatory compliance for law firms is Know Your Customer (KYC) due diligence. KYC regulations mandate that law firms verify the identity of their clients, assess potential risks associated with them, and monitor their transactions continuously. Failure to comply with these regulations can result in severe penalties, reputational damage, and legal consequences. Therefore, it’s crucial for law firms to have robust KYC processes in place.
Yet traditionally, KYC processes have been manual, time-consuming, and prone to human error. Fortunately, workflow automation has emerged as a transformative opportunity to revolutionise how law firms handle KYC. Here, we look at the potential of automation to streamline KYC processes, making them more efficient, accurate, and future-proof.
The Benefits of Automating KYC Processes
The benefits of leveraging workflow automation to streamline KYC process are manifold:
- Reduce time and resources: By automating KYC processes, firms free up time and resources and allow lawyers and staff to focus on higher-value tasks.
- Improved accuracy: Automated processes minimise the risk of human error, ensuring adherence to regulatory standards.
- Scalability: Through faster processing, firms can handle a larger volume of KYC requests, without compromising on quality.
Implementing Automation in KYC Workflows
Effectively implementing automation in KYC workflows requires law firms to take a strategic approach. This involves identifying pain points in existing processes, selecting the right workflow automation tools and technologies, and integrating them seamlessly into the firm’s infrastructure. Additionally, training staff on how to use these tools and managing change effectively are essential for successful implementation.
It’s also important to keep in mind that while workflow automation offers significant benefits, it can also present challenges and risks that need to be addressed. For example, data security and privacy is a major point that needs to be considered. Fortunately, Sysero’s workflow automation technology provides the ability to create custom data retention policies to govern how and when data is erased. Additionally, Sysero enables firms to not only anonymise data, but go one step further with pseudonymisation.
Real-World Example: Wikborg Rein
Top-tier rated international law firm Wikborg Rein is one firm that has found much success with automating KYC processes. The firm’s digital client intake solution, developed in collaboration with Sysero partner PSA Consulting, uses a built-in risk matrix to automatically assess a new client or case against Money Laundering Act requirements. Client information is automatically checked against various public registers and information databases and their identity authenticated through their Bank Identifier Code. All client data is stored (and deleted) in accordance with GDPR legislation.
Any client or case that falls outside the requirements is automatically routed to a simplified workflow for further assessment to ensure compliance and once approved, automatically created in the firm’s integrated internal systems. Every step of the process is documented for internal quality control and compliance protection.
Conclusion
Automation has the potential to revolutionise KYC processes at law firms, making compliance more efficient, accurate, and future-proof. By embracing automation, firms can streamline their KYC workflows, reduce compliance risks, and enhance client satisfaction. As regulations continue to evolve, automation will play an increasingly critical role in enabling law firms to navigate the complex landscape of regulatory compliance successfully.
To learn how Sysero can help your firm automate its KYC processes, get in touch with our team.