Beyond compliance: Why integrated AML and client onboarding is a strategic advantage for Australian law firms

With less than a year until the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2024 (AML/CTF Amendment Bill) requirements take effect, Australian law firms face a pivotal decision: how to approach compliance.

There are two options: Treat AML compliance as a standalone process or strategically integrate it into client onboarding. The business impact of these approaches couldn't be more different. The former creates significant risk and inefficiencies, while the latter creates a strategic advantage.

Below we explore the costs of treating compliance as an isolated function, and how an integrated approach provides a competitive edge by delivering better compliance outcomes, increasing client satisfaction and reducing time to revenue.

The cost of fragmented compliance

Many firms are choosing to approach AML compliance as a separate, parallel process from client onboarding. Some think this will make compliance more manageable, or that it's better to let compliance teams and client intake teams run their own processes rather than restructure responsibilities. Others select this option because of upfront costs, which can include new technology investments, workflow redesigns and training.

While it may appear easy and cost-effective to treat AML compliance as a standalone process, in practice it's actually the opposite - there are many drawbacks that significantly outweigh the short-term benefits. These include:

• Operational inefficiencies - Running AML checks separately from onboarding leads to duplicate data collection efforts. Asking clients for the same information multiple times creates frustration that can harm relationships, and delays revenue recognition.
• Inconsistent risk assessments - Siloed AML compliance processes often result in disconnected risk evaluations. Client risk factors identified during onboarding and AML assessments fail to inform one another, creating blind spots in your firm's overall risk profile.
• Compliance gaps - Parallel processes increase the risk of missing critical compliance requirements and can lead to documentation gaps, which could trigger regulatory scrutiny under the amendment bill's new outcomes-based framework.
• A poor client experience - Multiple, sequential due diligence processes create a slow and cumbersome onboarding experience that may drive your clients to seek out competitors with more efficient alternatives.
• Strained resources - Separate systems and processes mean higher management overhead and extra staff training requirements, which drains resources that could be used for revenue-generating activities.

The strategic advantage of integration

Leading Australian law firms, on the other hand, are experiencing strategic advantages across every dimension of firm performance by embedding AML compliance directly into client onboarding workflows. This creates a unified journey where identity verification, source-of-funds checks and risk assessments occur naturally as part of client intake. Because this approach eliminates the need for sequential compliance checks, firms can approve and begin work significantly faster.

Integrating compliance and onboarding also enables real-time risk assessments that consider both legal and AML factors, allowing firms to align with the amendment bill's holistic risk management requirements.

Other benefits of integration include fewer data entry errors, increased efficiency and consistent policy application. For staff, an integrated approach simplifies training and technology stacks, freeing them to focus more time on higher-value work.

The business impact of the integrated approach

Integrated AML compliance and onboarding delivers measurable improvements across key performance indicators, including:

• Client satisfaction - Unified processes improve client onboarding experiences through reduced friction and faster engagement.
• Time to revenue - Concurrent processing significantly reduces client onboarding time, which accelerates matter commencement.
• Compliance audit results - Integrated systems ensure documentation is complete and processes are consistent, which drives better compliance outcomes.
• Staff productivity - Unified workflows increase staff efficiency by eliminating duplicate data entry and accelerating approvals.
• Technology ROI - Consolidated platforms typically deliver a higher return on investment than multiple point solutions.

Steps for a successful rollout

For those firms that choose the integrated approach to AML compliance, it's critical to start planning now, especially since there are limited AML/CTF specialists available. Follow these key steps to successfully roll out a unified AML compliance and onboarding process:

1. Assess your current onboarding processes
2. Select an integrated technology platform
3. Develop a change management plan
4. Test your platform with pilot programmes
5. Roll out the platform across your firm

Transform AML compliance into a strategic advantage

The choice is clear: your firm can either suffer the impacts of fragmented compliance, or turn AML/CTF Amendment Bill requirements into a source of strategic advantage. Treating compliance as a set of isolated requirements adds friction and risk, while integrating compliance into client onboarding improves outcomes and efficiency.

The firms that grow the fastest won't just comply with the new standards - they'll use them to increase client satisfaction and build operations resilient enough to thrive in a demanding regulatory environment.

Intapp has been helping top global law firms including Gadens and Baker Botts navigate complex regulatory requirements since 2000.

Book a call with one of our legal specialists to discuss how we can help your firm integrate AML compliance into your client onboarding processes.