The requirements of Know Your Client (KYC) and Anti-Money Laundering (AML) have never been greater as regulators both in the UK and worldwide attempt to crack down on fraud and criminality.

As accountants, you have rigid responsibilities, both legal, professional and moral, to make sure that you conduct the proper KYC and AML checks.

While many firms are aware of this obligation and have processes in place to make sure the checks are conducted correctly, others fall at the first hurdle by failing to correctly undertake these checks during the onboarding process.

Like many other functions within accountancy practices, the various stages of KYC and AML compliance are not only onerous but can sometimes be disjointed and spread over several manual and automated processes.

Manual vs Automated

For example, those firms who have invested in practice management software might have the ability to perform the necessary AML searches within it, or they might use a platform that integrates with it for this function.

However, they may also have a separate AML form or template that needs to be completed, which is sent out manually via email by a Partner, Director or client manager.

These two elements of the AML process never sit on the same platform alongside each other or aren’t stored in the same place.

This means that they can’t easily be accessed by those who need them, whether that is to check or update them in future.

By operating a fragmented and outstretched system for AML and KYC you create opportunities for error, which could prove costly in future.

Up to date

The international regulatory framework surrounding KYC and AML is constantly changing, as are the expectations of accountants.

These regulatory changes need to be reflected in the communications and processes you use to conduct these necessary checks.

Having a system that relies on a combination of manual and automated processes, as well as multiple platforms, often means you increase the chance of failing to update essential documentation or make necessary changes to the checks that you conduct.

Collaboration

Onboarding a client and conducting the required KYC and AML processes often requires close collaboration between Partners, managers and other departments within a firm.

If the various stages of checks and communication related to KYC and AML are conducted via different systems, software and platforms it can make collaboration challenging, often frustrating the process and slowing it down.

This can also hamper accountability and transparency within a team, which can be essential during such a critical process.

While many other functions within accounting have been liberated by highly integrated cloud software, this is one element of running a practice that remains underinvested.

Risk vs Cost

Of course, there is an increasing number of onboarding and CRM systems that integrate and interact with the different stages of KYC and AML to make this process easier.

However, it is one of the many forms of software competing for spend from firms as they try to innovate and automate.

This means that many decision-makers in firms have to decide based on value i.e., What will offer the greatest return to the practice, either through greater efficiencies or new opportunities to grow their offering to clients?

This is why many firms have focused on client-side software and systems that serve the needs of their clients, which also the work of accountants easier so that they have more time to deliver added-value advisory services.

Practice-side software, which includes the various practice management software suites, has probably received less attention, although many firms will have invested in it.

Often, where they use these platforms they might not be taking full advantage of them by integrating them into other systems, such as CRM – where they have automated KYC and AML solutions in place.

Although the immediate value of these systems may not be as obvious, they can be just as essential. Especially where they help firms to manage risks that could be a drain on their time and resources.

KYC and AML can be a significant risk and automation of these processes via CRM and onboarding software is an ideal solution in most cases.

Like online accounting systems, these programmes allow firms to automate much of the onboarding process, including the necessary AML and KYC checks.

They can even create fully populated documents that are compliant with current legislation, which can be updated instantly as regulations change.

What’s more, this can give a practice better access to the required information, allowing for greater collaboration, improved compliance and a smoother onboarding process.

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