If you are the busy owner of a firm which has to comply with the Anti-Money Laundering (AML) laws and regulations, hardly a day will go past without someone trying to sell you “digital onboarding”. But what exactly is it? And can it (indeed, can anything) really be “quicker, easier, cheaper, better” without compromising on that old-fashioned quality of ‘doing a job properly’?
Some people reading this may associate digital onboarding exclusively with e.g. the use of mobile phone apps to dispense with the need for a physical passport check in the office, and/or with screening tools which will crawl the internet for sanctions, PEPs and adverse media “hits”. But in reality, those are just one part of a bigger whole which, if done in totality, can save you, depending on your numbers, hundreds or even thousands of man-hours per year.
So, as a guide for the uninitiated, we summarise below all the things that it’s now possible to do with, and within, a digital onboarding platform. Remember that the big, game-changing difference is that the end-client is providing all their required information and documentation direct into one, single upload link which you send to them, and that from then on, all that data and documentation can be sent to any of your other systems, without need for human intervention. And we’ll assume for the sake of argument that we are comparing this with a (non-digital) onboarding model whose primary mechanism is the sending, completion and return of PDF documents to and from clients via email, with subsequent extraction and onward use by staff members of the information contained in them.
(NB A word of warning in advance: if some clients, for whatever reason, aren’t comfortable, competent and/or enabled with technology, then you’re still going to have to do it the old way – so don’t ditch the old skills completely.).
Basic data capture & validation
Allows end-clients to input core information digitally, without the need for emails, meetings and phone calls. Highlights where information is missing or inconsistent and warns the client immediately (so that you don’t waste time chasing them after you discover it two weeks later.) Also saves the time of staff no longer engaged in re-keying data into practice management and accounting systems
Validation-based risk alerts
Silently highlights the presence of static identified risks, e.g. businesses where cash or crypto is, unexpectedly, the main method of payment, or where the stated turnover is very high for the number of employees. How long would it take you to spot this?
UBO Builder – ownership self-declaration
Allows entity end-clients to create an organogram of their ownership structure and to make legally necessary declarations which can then be verified from public sources.
AI-enabled business model and source of wealth enquiries.
Prompts end-clients to provide an appropriate level of detail on their business models and SoW. Reads answers and raises silent alerts where clients have failed to provide the requested level of detail, enabling human follow-up. Generally results in much higher quality levels in what is a major area of concern for regulators.
AI-enabled automated risk alerts
As above but raises silent alerts where it detects business activities with heightened financial crime risk – for example, connections to defence, precious metals, fine art, luxury goods and other high-risk sectors. Would all your staff spot such issues themselves?
Remote ID&V (e-verify) UK
Allows end-client to be legally identified and their address verified without the need for documentation, e.g. for electoral roll and other trusted government sources. Saves time on production and review of ID&V documentation, in a way which is acceptable to regulators and won’t result in negative inspection findings.
Remote ID&V (mobile phone)
Allows end-client legally to identify themselves through remote matching of a live video against an uploaded ID document such as a passport or driving licence. Saves time and trouble on office visits and photocopying of physical documents, in a way which is acceptable to regulators and won’t result in negative inspection findings.
General document upload
Allows end-client to upload soft copies of documents such as passports, driving licences and utility bills and save them to a centralized but client-specific location. Saves time and trouble on office visits and photocopying of physical documents and/or on staff having to detach email attachments and manually save them to the (correct) file.
Automated screening (Sanctions/PEPs/ Adverse Media)
Conducts automated silent background checks against end-client during onboarding and alerts firm to Sanctions, PEP or Adverse Media risk. Saves time and removes human error from staff having to re-key names and details into separate search and screen software programmes.
Source of Funds – Open Banking checks
Conducts automated checks into end client’s bank account to verify stated sources of funds such as salaries, pensions and investment income. Reduces time taken by staff in the analysis of source of funds documentation.
Automated risk assessment & scoring
Automatically calculates a pre-final risk score based on end-client input of information during onboarding. Can be onboarder-supplemented for final risk rating. Injects consistency and discipline into the process and reduces the risk of the firm being adversely affected by poor staff understanding of risk assessment requirements.
Digital signature of documents and notices
Allows end-client digitally to acknowledge and sign required contractual and regulatory agreements, notices and terms & conditions. Saves time and trouble on staff having to detach email attachments and manually save them to the (correct) file.
AI NLP Biz-model validation – Positive Screening
Conducts automated silent ‘genuineness’ checks against entity end-clients to search for positive indicators that their business operations are genuine – e.g. by analysing their staff profiles, marketing/outreach and customer review activities against known genuine businesses of the same type. Saves time on staff having to conduct multiple manual web searches to obtain the same results (which many will not have the skill or experience to do anyway).
AI-enabled document analysis
Reads documents such as passports, utility bills and bank statements uploaded by end-clients to check that they are within date and are of the type stated. Saves time on staff review of documentation and reduces human error – e.g. failing to spot that documents are out of date.
Companies House API – Active Directors auto-upload
Auto-imports the names and details of current active directors of entities during onboarding and asks end-clients to confirm or change. Easier for clients to complete and saves time on manual research on the Companies House website.
Companies House API – Persons of Significant Control auto-upload
As above but for Persons of Significant Control.
Onboarding pipeline tracker and management tool
Allows you to keep track of how many new clients have either completed, or have yet to complete, onboarding (plus their relevant assigned fee-earners) and to intervene if things are going too slowly.
Tim Parkman
Director, Client Delivery
Marker AI is a digital onboarding platform for professional firms which comes with know-how like this built in. Contact us here for a conversation.