AML Risk Assessment: Proclaim Case Study
There have been some major changes to UK anti money laundering (AML) rules which came into effect on 10th January 2020 with the introduction of The Money Laundering and Terrorist Financing (Amendment) Regulations 2019. These regulations provide an update to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017).
The new AML regulations provide strict rules and guidelines which all financial institutions and businesses should adhere to in order to minimise the risk of money laundering. The prevention of money laundering and counter terrorism are now a top priority for law enforcement so the new AML rules should be of utmost importance to all businesses at risk of being used as a source of funds for money laundering and terrorist financing.
We recently assisted a law firm in developing their Proclaim case management system to enable the firm to carry out due diligence on all files and adhere to the AML rules by implementing AML risk assessment processes.
The client wanted to ensure that staff were completing comprehensive risk assessments before proceeding with taking on a client’s case. It was becoming difficult given the volume for a supervisor to review every single case. As such, a dedicated process was put in place to ensure that fee earners were able to vet cases themselves whilst still being AML compliant and only being flagged to supervisors when certain criteria was not met.
Furthermore, they wanted a way to produce a management report to ensure the checks were getting completed correctly, without having to access every single case individually.
At LPS, we put a system in place that allows the user to navigate through the necessary checks with ease. When a case is opened, a task is automatically assigned to the user to prompt them to conduct the assessment. If an attempt was made to delete the task, it would not be allowed without having actually completed the risk assessment. This action provided two benefits; the fee earner would always be reminded that they had outstanding risk assessments to complete, and the Supervisor would, at a glance, have the ability to view all the outstanding assessments be it by user, team or firm.
The process would start with a risk assessment hub that displays to the user the parts of the assessment that have been completed, and those that are outstanding, such as client ID verification, Equifax checks and proof of funds. The hub takes the user to an AML checklist and risk assessment that displays all the warning signs for the user to identify any cause for concern and review the risks.
Through use of these screens, users are able to access extra information from the SRA and Equifax if needed. Once these tasks have been completed, the hub is marked up with dates of completion and the user who conducted each individual check; thereby, ensuring accountability. Finally, any risks are reported to a supervisor via an email containing the relevant details.
The benefit of having a central hub with access to all the assessment and reminders ensures that the user is performing the essential checks with ease and in a compliant manner. Furthermore, access to external websites in the same place such as the SRA and Equifax allow the users to review additional information rapidly.
With the hub identifying the completed and outstanding parts of the process, it allows supervisors to be notified when checks have not been completed, meaning they no longer are required to audit each individual case, freeing up their time to perform other tasks. It can also help highlight potential training issues with members of staff who may not be performing the necessary standard of compliance required when assessing their cases.
Additionally, the management reporting allows complete and quick oversight of any outstanding risk assessments in the firm ensuring compliance is always met.
How can Legal Practice Support Help?
If you would like to discuss how to incorporate rigorous anti-money laundering (AML) risk assessment processes into your Proclaim system, or to discuss general Proclaim development, please do not hesitate to contact firstname.lastname@example.org for further information.
James Denby is Head of Proclaim Development at Legal Practice Support and possesses in excess of eight years’ experience, both in-house and as an external consultant, in developing legal case management systems. James is also uniquely in the position of having worked as a Senior Manager within a law firm, and as having conducted his own caseload as an experienced Paralegal. As a seasoned Proclaim Developer, James understands the requirements of any IT system/workflow/task from the view of the user, as well as from an IT perspective.