When it comes to AML compliance, the government’s asking real estate agents and lawyers – like you – to take reasonable steps to verify your clients and manage your risks.
Reasonable steps sounds pretty vague, though. That’s why we’re here to clear that up, giving you confidence that you’re following a consistent and correct approach for every client, every activity, every time.
The risks of not following AML compliance are stark: your reputation is on the line, you risk disrupting business, and you’re up for some hefty legal consequences and financial implications.
The last thing we want is for you to tiptoearound “reasonable steps”, second-guess every decision, and have that nagging fear of dropping the ball.
Reasonable steps can be used in verifying identity where standard verification is not possible, as a backup plan if your client fails the first level of KYC or AML checks, or if they are deemed higher risk.
So, we see 3 priorities here:
A heads-up on what to expect from this blog: we’re not going to get super specific on scenarios and the types of reasonable steps. Please don’t take this as individual legal advice – it’s more to give you general context on the topic of AML compliance. That said, we’ll point you in the right direction if you need more info on the finer details.
Onboarding your clients
The activity you’ll do most in AML compliance is onboarding – so let’s start here. When it’s time to onboard a client, there are several phases you must complete:
The other phase – which is significant but not as frequent – is your ongoing monitoring:
Reasonable steps aren’t the process you take all the time. It’s the backup when something fails.
You must follow the standard verification processes first. For example, if done digitally, the AML checks include ID, live face match, and address verification.
It’s only when these fail – for example you can’t prove your client’s address because they’ve just moved countries – that you fall back on reasonable steps.
APLYiD is designed to minimise the grey areas of AML compliance.
AML Compliance UK – where to turn for more info.
As promised, if you’re after more guidance on the specifics of reasonable steps, we recommend you check out these links:
There’s a case for going above and beyond: you get a uniform process, remove the ambiguity, and have better records.
Interestingly, many businesses discover that going above and beyond minimum requirements actually reduces complexity.
Instead of having different processes for different risk levels – or relying on individual judgement calls – they use the same approach for everyone.
Take AML biometric verification. You might not legally need it for every client, for example if you’ve met them face-to-face, but using it consistently means staff don’t have to remember different procedures.
This approach removes confusion about whether a particular client needs a specific check, or whether meeting them in person changes the requirements. Or where you’ve scanned and stored their ID.
We know a mid-sized real estate agency who used to have different AML compliance procedures for different clients. Staff got confused about which checks to perform for each situation. Training new employees was a nightmare.
The agency decided to overhaul this and instead carries out AML biometric checks (using APLYiD) for every client, regardless of risk level or whether they verified their ID in person too. Yes, it’s more than strictly necessary in some cases – but overall it saves them time, money and stress.
The benefits of this approach are immense:
AML compliance will always have grey areas.
Unfortunately, you can’t completely steer clear of falling back on “reasonable steps” and using your discretion. There’s always going to be verification fails and those out-of-the-box activities.
But with APLYiD you’re less likely to come across ambiguous situations because you get a clear, streamlined, low-admin approach with these 4 simple steps:
The next logical step for your AML Compliance: Get started with APLYiD today.
We’ve designed it to be so easy you don’t need to speak to us, book a demo, or get any training.
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