Automate and accelerate the AML and KYC process using technology

Accountancy practices are facing increasingly stringent Anti-Money Laundering (AML) regulations, and while these regulations aim to combat financial crimes, maintaining compliance may pose significant time and resource challenges. Many AML and Know Your Customer (KYC) processes are clunky and long-winded. Between due diligence, transaction monitoring, reporting of suspicious activities, constant documentation collection, and meticulous record-keeping, managing AML is becoming a full-time job.

The problem is becoming especially critical for small practices, who may find they are spending so much time managing AML, that they can’t focus on advisory work and new lines of billable business. To help, practices need to look to the technology available to take care of AML faster, and better. Without it, practices will fall behind in tackling the AML burden, and won’t be able to compete with those that use technology to simplify AML compliance.

However, this area of tax and accountancy technology is moving quickly, and many practices still need to familiarise themselves with the new types of tools, their scope, and the data needed to help accelerate and simplify AML compliance.

The new technologies accelerating and simplifying compliance

One of the first steps of onboarding any new client is identity verification, which involves checking identity documents like passports or driver’s licenses to make sure the person is genuine. Done manually, this process can be extremely time-intensive. Practices often find themselves waiting for information from clients, while dedicating time and resources to manual data entry into various systems that aren’t integrated. With so many processes, there’s a looming threat of information leaks or miskeying in data.

However, with new technical innovations, digital identity verification is accelerating and simplifying compliance. Many practices use digital AML checks with biometric KYC verification. Biometrics, particularly facial recognition, stand out as powerful weapons in the battle against identity fraud. Leveraging a combination of geolocation, facial recognition technology, optical character recognition (OCR) for ID fraud protection, and robust datasets, biometrics can be integrated into accounting platforms to protect against digital fraud and crime.

This approach is helping practices to authenticate individuals during the client onboarding phase, eliminating the need for manual document scanning and photo checks. By using sophisticated algorithms, these systems conduct rigorous assessments of images to verify authenticity, scrutinising factors such as ‘liveness,’ facial structure, lighting conditions, and even compensating for changes in appearance over time.

What do biometric KYC checks involve?

Firstly, the verification process can be started via an automated text alerting a practice to scan a customer ID to capture their details. This bypasses manual input, and the manual process of sending documents back and forth. Next, the customer can take a selfie photo, and this information can all be verified using the leading credit bureaus and government databases to verify the customer’s name, address, and date of birth. With connections to accurate, complete, current, consistent, and relevant data, practices are in a much better position to detect, prevent, and report potential money laundering activities effectively.

Many practices ask how biometrics achieve accuracy, and the answer is that biometric KYC uses thousands of instant checks for facial structure, and lighting—similar to when you use face ID on your phone. It also compensates for age and facial hair changes, guaranteeing that the person being verified is a real human being and they are who they say they are.

Once the customer is matched with their ID, a report can be generated—ready for download and storage in an integrated document management system—to prove digital verification.

In addition to bolstering security, these types of technological advancements are driving notable improvements in speed and efficiency within the AML compliance process. Many systems have revealed significant reductions in the time required to conduct AML data checks, with reported average processing times as low as one minute and 15 seconds.

The long-term importance of good customer onboarding experience

While all practices are undoubtedly dedicated to preventing digital money laundering, the reality is that providing a positive onboarding process is also in large a good way to acquire and retain more clients. A quick and efficient onboarding process shows technical competency and may also present practices with a great opportunity to upsell additional services, as satisfied clients are more inclined to explore further offerings.

A smooth onboarding experience also enhances the likelihood of referrals, as clients are more likely to recommend efficient and easy-to-work-with professionals to others, as positive word-of-mouth referrals are paramount. Practices have every opportunity to automate, accelerate, and secure their AML and KYC client onboarding process, and those who master the use of these new technologies are likely to pursue technical innovation in other key practice areas.

Interested in learning more about what automating biometric AML and KYC checks can do for your business? Click here.