3 ways EIDV can help you meet SRA standards
A recent sizable fine issued by the SRA against a large firm for AML failures has created a flurry of conversation around law firm’s approaches to customer due diligence (CDD). Here are 3 ways electronic identity and verification (EIDV) can help law firms avoid the SRA’s critical eye.
The Solicitors’ Regulation Authority (SRA) started 2022 by issuing a major law firm with one of the biggest fines for AML failings to date (£232,500). Notably, this fine was not for direct Anti-Money Laundering failings but rather for inadequate training, processes and reporting.
This has, of course, resulted in a wider conversation in the legal sector around CDD activity, client onboarding and how electronic identity and verification (EIDV) can help avoid the SRA’s critical eye. Mirror provides regulated businesses with a comprehensive all-in-one system for KYC and AML, verifying the client's identity and address at source. Here are 3 ways our EIDV tool can help you meet SRA standards when it comes to CDD.
Meet the obligations of Regulation 28 The SRA has been clear on its criteria for what enables an EIDV tool to be successful. Its requirements have steered the development of Mirror, ensuring we meet all SRA guidelines. The regulation states that firms using electronic means of verification for their CDD must ensure that information must be obtained from an ‘independent, reliable source’, and encourage the use of legal tech where multiple data sources are used. We have built a tool that does just that, verifying your client's identity and address to a near-foolproof degree of security, in real time. We do this in three ways: we combine NFC-enabled biometric chip scans with document scans and a liveness check, we verify data at source and we establish the origin and genuineness of electronic Proof of Address documents.
Have a detailed and accessible audit trail Many of the SRA’s fines relate back to lack of audit. We provide your firm with a fullly automated audit trail that’s always up to date. Mirror can also pass randomly selected transactions directly to the SRA, which can be split per business area (e.g. split by departments or sectors in the firm, or by fee earners). Our automated audit trail also saves you time during internal reports, as no ‘guesstimating’ statistics is required: you know exactly what documents are submitted for ID and address checks, your clients’ average time to completion of CDD, the percentage of results you get that pass instantly vs. those that require input. This is also an incredibly valuable tool when ensuring human oversight is applied.
One centralised system for reviewing and applying logic and context The SRA clearly state that when using RegTech, law firms should be sensitive to human error and context. In their advice, they say “It is not acceptable to simply run a search on a prospective or current client and file it as having completed the identification and verification process, without consideration of the wider risks.” Mirror allows you to take control of your processes, automating much of the admin work, but still giving you full visibility of team activity and submitted details. Our EIDV tool has one centralised dashboard which means administrators can dip-check verifications, check completions and records, and our no-cap approach to team members means you can ensure all team members are following the relevant processes.
Not only does Mirror help your law firm increase its security measures exponentially, but it also saves your firm money and allows fee-earners to focus on matters, not admin. To speak to our team about how Mirror could work for you, book a demo.