Law firms are required to conduct risk assessments, client due diligence (CDD) and ongoing monitoring on their clients. The precise processes for CDD and risk assessments are often complex and vary greatly, depending on industry and jurisdiction.
What is the problem?
The Fourth Money Laundering Directive, which came into force in 2017, introduced a heavy emphasis on employing a risk-based approach to money laundering. This puts a certain degree of the onus of identifying and prioritising risks on law firms. Firms often struggle with systemising risk scoring and ensuring high-risk clients are automatically flagged based on their scores. Being able to define your firm’s own scoring system will help ensure firm-wide consistency and that nothing falls through the cracks.
How do we solve it?
In our latest update to the anti-money laundering onboarding solution, we’ve added a new function which allows users to create dynamic scoring fields in their forms, enabling them to add/multiply/divide/subtract the value of two or more fields. For example, you can now add scoring to the risk assessment section of your client’s onboarding form. A risk score can then be automatically calculated for each risk area. Lawyers can assess their prospective client’s risk level, with the MLRO or Compliance Officer being able to easily review risk scores, and update the scores should they deem it necessary. Note, our AML onboarding clients receive a bespoke system that will come built with the risk scoring feature already enabled.
How does it work?
Our best-practice workflow includes scoring for three core areas: Client type, jurisdiction, and nature of engagement. While on other platforms you would be required to give a risk score for these three areas, our new feature allows for an automatic score to be given based on your answers to the questions on the following risk factors:
- Client risk factors
- Geographic risk factors
- Matter/ transaction risk factors
Once the solicitor has completed the form, the administrator, typically the MLRO, will be able to review the scores and, if necessary, revise the responses.
New feature includes the option to override the calculated score
The risk-based approach aims to give lawyers more freedom to give their own risk scores. With our new feature, lawyers will now be able to override the calculated risk score and give their own score if they feel the total score is not reflective of their opinion on a client’s risk level.
Need to edit the scoring system? It’s easy
Our client onboarding workflow and dashboard is a bespoke system that is built together with our subject matter experts. Nonetheless, the workflow is easy to edit:
1. Changing the scoring
Start editing a scoring field on your form:
- Find the field you want to edit
- Click on the “Visibility” icon
- Click on the “Scoring” tab
- Change the numbers on the right of each field option
2. Changing the calculations
- Select the calculation field you wish to edit for your equation
- Edit which field/s you wish to add/subtract/divide from
- If necessary, edit the equation (add/subtract/divide)
- Add as many fields/ equations as you wish
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