At a glance
- Anti-money laundering (AML) compliance can be challenging to implement effectively, but various software solutions are available to help firms manage their obligations.
- Several providers offer different approaches, from comprehensive platforms like AMLCC to standalone verification services like Creditsafe, each with distinct features for recording, verifying, and checking client information.
- Whilst software can be beneficial, particularly for busy practices, the IFA warns that practitioners must thoroughly understand what their chosen platform does and doesn’t offer, as some may lack core functionality or oversell the value of electronic checks.
It is your responsibility to ensure that you are compliant with these regulations – and therefore step one is being clear on what your obligations and responsibilities are. However, the judicious use of technology could save you considerable time and energy when taking on new clients, and with the ongoing checking and periodic audit.
While it’s possible to broadly get by, engaging software and service providers is likely to be a wise investment, especially as the main considerations from a system and processes perspective are split into two core areas: things that need to be recorded; and things that need to be verified and checked.
The latter is not always easy to do on your own in an efficient and comprehensive way. Some systems also incorporate biometric ID checks as well as PEP checks, all dependent upon which package is chosen and what your needs are.
The requirement to record could reasonably be expected to be undertaken in various ways, including within client folders on your internal systems, and through an array of spreadsheets and documents. However, this fragments where the information sits and is not an easy way to demonstrate how well you are conforming, or for you to spot gaps.
Considering appropriate and proportionate technology could therefore provide peace of mind, as well as significant time saving.
Here, we look at some of the solutions IFA members have been adopting, and while not an endorsement, they provide a useful way of sizing up what is the most suitable approach for your needs.
AMLCC (Anti-Money Laundering Compliance Company)
AMLCC (Anti-Money Laundering Compliance Company) sits at the comprehensive end of the spectrum, promising to provide a broad range of processes required to support compliance.
Not only does it provide a subscription-based online platform that acts as the container for the information that needs to be recorded and stored, it also provides tools to help conduct and complete essential assessments for both the firm and individual clients.
Providing a range of bolt-on services, including the essential verification and checks on a pay-as-you-go basis, means that you can scale to your usage in a transparent way.
Other benefits include the option to buy online training and assessments for staff and money laundering reporting officers.
If required, the firm also offers consultancy services, which may be of use for firms whose affairs are more complex.
While for some this may seem like a lot, in reality AMLCC has developed a comprehensive approach and has the practical experience to back things up – not an easy task in a developing regulatory environment, and this should provide significant comfort. However, if this doesn’t fit with your current requirements, there are plenty of alternatives.
TaxCalc: standalone system
As a long-term provider of compliance and practice management software, TaxCalc has built up a solid reputation over the years based on functionality and cost effectiveness.
Its AML Centre offers an online platform for the recording aspects, acting as a central go-to hub, and flexible options for the necessary checks run in conjunction with Equifax.
While it doesn’t necessarily offer the same level of training or specialist consultancy, what it does provide is a handy integration with its Practice Manager software and also Companies House, allowing for a much more efficient use of existing data.
While this is a real bonus for those who are already existing customers, the fact that it is available as a standalone system means you can still make use of the AML Centre without compromising your other software choices.
BrightManager: practice management modules
If you’re using one of the well-known practice management software tools, it’s more than likely that they will be offering an integrated AML module within their existing system. A good example of this is BrightManager, where every client record also includes a tab labelled ‘risk’, which takes you to a questionnaire that guides you through some of the top-level essential things that need to be checked and recorded.
Managing the review and follow-up process is very straightforward, with tasks allocated to the relevant staff member, as is the allocation of the visible ‘risk’ label that features prominently across their records.
AML checks are run via Veriphy and purchased in bundles, with the results being added to the client record automatically, or you can upload from another provider as required. The benefit of using these kinds of internal modules is that everything about the client is in one place, including the regular communications stored against work. It also can be included in a more streamlined onboarding process if, like BrightManager, they also have functionality for generating proposals and creating workflows from client acceptance.
The obvious downside here is that they are not available as a standalone solution, so to use them as your AML software will require adopting them as your practice management solution too.
Verification and check providers
At the other end of the spectrum there are organisations that focus solely on verification and checks. What they lack in terms of providing a complete solution they make up for in allowing real flexibility in what kind of approach you choose to take.
Creditsafe is a good example here; you can complete the broadest range of time-consuming checks, including more specialist areas that they may not offer via third-party integrations, for example Source of Funds, without the cost of another software subscription to handle the rest.
Veriphy works in a similar way, although perhaps has more to offer in terms of training and assessment. The range of some of their reports include FraudScore and adverse media checking, and a service to help create policy documents.
Things to check
Ultimately, there is plenty of choice out there, with solutions to fit every type of firm and budget. Software providers that make obvious their credentials with supervisory bodies (such as the IFA), or have recognisable affiliations with compliance experts, generally indicate that they know what they are talking about, and are likely to have you covered as the regulations evolve over time.
The IFA’s view
We asked the IFA AML review team for their thoughts on AML software platforms gathered through conducting reviews of IFA-supervised firms.
Software definitely has its place in the AML landscape, especially in busy practices, where compliance processes need to scale to large numbers of clients from different sectors. It can also come with pitfalls, and you need to have a firm grasp of the regulations the software needs to meet or an understanding of what it does (and does not) do.
As a practitioner, you will be aware that the Money Laundering Regulations are broad in scope and your firm must be able to demonstrate its compliance to the IFA as your supervisor.
Software packages are often sold as complete solutions but lack core functionality such as a template policy and procedures document that can be tailored to your firm, integral client risk assessments or the firm-wide risk assessment.
Be wary of software that oversells the value of electronic checks. These checks do not replace the requirement to obtain photo ID and proof of address from clients. They can be useful as supplementary measures where enhanced due diligence needs to be applied but should be used in conjunction with normal customer due diligence.
Client risk assessments within software platforms are often very basic as developers aren’t well versed in the money laundering risks associated with the accountancy sector.
The risk assessment tool should be configurable to add any further risks the firm is exposed to. Where risks are identified, you should be prompted to provide an explanation of how your firm has mitigated the risks or why you do not consider the risk to be high in this instance.
We have seen software platforms that allow the user to override any identified risks and select their own risk rating with no justification. Needless to say, such ‘risk assessments’ do not impress supervisors. Remember, there is no such thing as a risk-free firm!
Software can be an effective solution to your AML responsibilities if used correctly. The good platforms have evolved to meet the needs of practitioners, with some systems allowing users to create bespoke risk-assessment templates for clients with similar risk profiles. Some can be used to perform biometric checks to verify client identity. Other useful features are integral training for staff, and of course the fundamental template procedures and firm-wide risk assessments.
Our advice to members is to properly research what the system does and does not cover to guarantee the software meets the requirements of the Money Laundering Regulations. If you have any questions, you can email the compliance team at [email protected] or call 020 3567 5999.
Richard Sergeant is MD of Principle Point and a freelance journalist.
The IFA will hold its AML Conference Online on 20 May. More information here.
