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How to use technology to stay compliant with the upcoming AML directive

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by Alex Williams, Tikit | about 2 months ago

As you’re probably aware, the EU’s fifth anti-money laundering directive (5AMLD) comes into force in January 2020. And law firms really do need to comply, especially as they’re particularly vulnerable. While banks and accountancy firms are much more geared up for this, law firms typically have fewer systems and resources in place with which to address money laundering, making them something of a ‘soft target’ for criminals. At the same time, failure to demonstrate that compliance processes are in place can have dire consequences: firms risk the ultimate sanction of being struck off. The question therefore becomes: how can firms comply in ways that are both compliant and cost effective? The answer is by utilising technology.

What does compliance look like? To assist with compliance with 5AMLD, technology can help by allowing you to verify the identity of new clients. There are two components to this. First, firms must verify that they’re looking at a legitimate document, generally a passport or driving licence. This is easy enough if it’s a UK driving licence, but what, for instance, does a Lithuanian one look like? Next, firms need to have verified that an individual is indeed who they claim to be, that they live where they say they do, and that their given date of birth is true. 

This article was first published in the November 2019 issue of LPM 'That's not all, folks', click here to read on.