For estate agents, onboarding new clients is your first opportunity to win them over and to set the precedent for the entire client relationship going forward. In a competitive market, your onboarding process needs to be as fast, seamless and as frictionless as possible. Clients who feel the initial experience is too complex, cumbersome or time-consuming are likely to walk out and go to your competitor.
Since the introduction of the 4th Money Laundering Directive in 2017, the level of due diligence that is now required has significantly increased the administrative burden when undertaking checks for both property purchasers and vendors.
It is now crucial that Estate Agents perform extensive client due diligence (CDD) on all parties (not only on your clients but also on all the counterparties) involved in every property transaction.
As Richard Ingles, Head of Client Development at NorthRow, explains in the following short video, the current challenges facing the property sector in relation to onboarding are significant.
4th AML Directive is Creating Onboarding Headaches
Property professionals now need to carry out comprehensive risk assessments on their clients and all their relevant Identity Documents. The level of due diligence that is required has significantly increased the administrative burden and the associated volume of checks needed to be tailored to each client. This increase of checks has inevitably increased compliance costs.
To ensure compliance, Estate Agents now need to appoint a Money Laundering Reporting Officer (MLRO), meaning they will need to train existing employees or hire more staff to keep up with the increased administrative workload.
Similarly, many Estate Agents still rely on manual processes to perform client due diligence checks which means that there is an increase in the potential for errors and longer onboarding times.
What to Check for the 4th AML Directive?
Anti-Money Laundering compliance requires a much greater depth of information that Estate Agents need to validate. Here is an example of our best practice solution we provide our clients:
- Address Verification Check
- Identity Document Verification Check
- Beneficial Owner Check & Monitoring
- CCJs & Personal Insolvency check
- HM Treasury Sanctions check
- Especially Designated Nationals List (OFAC)
- Politically Exposed Persons (PEPs) Checks (Both on Domestic and International)
- Known as Deceased
- Plus more
There is also the added complexity when checking a company involved in property transactions. Not only will you need to do comprehensive identity verification on the beneficial owners of a company, but you will also then need to check all the directors and their relevant identity documents.
If an Estate Agency also lets the property to tenants, you will be responsible for performing Right to Rent checks on all tenants as well as additional due diligence on Landlords.
Why Automating Client Due Diligence is Key to Faster Onboarding?
Since the directive, many agents are moving to newer, more cost-effective solutions that simplify compliance, reduce cost and accelerate onboarding.
At NorthRow, we work with a number of the UK’s leading Estate Agents and property firms to help automate AML, Right to Rent and ID verification checks on all clients, ensuring a fast, secure and compliant onboarding process.
With access to one of the largest databases of screening information available in the UK, NorthRow’s technology checks buyers and sellers and all relevant ID documents in seconds – all via a single API.
All checks are stored (encrypted at rest and in transit) within the NorthRow console, time and date stamped, are fully secure and encrypted and offer a full audit trail helping to ensure you can easily demonstrate compliance.
Our clients have saved time and money automating their previously laborious manual processes.