Insights: Using AI to achieve a balanced onboarding process
Pinsent Masons recognised a major challenge affecting AML-regulated businesses globally. A truly risk-based approach to AML compliance using traditional tools is slow and painstaking. This forces businesses to adopt an unbalanced approach.
AML systems focus on onboarding clients rather than balancing risk management efforts across the whole relationship. Conducting full due diligence on each client is time-intensive – a frustration for firms and clients. Disproportionate time is spent on low and medium-risk clients, diverting resources from higher-risk clients.
Pinsent Masons concluded radical technological solutions were needed to streamline onboarding and create a balanced AML compliance system.
Pinsent Masons partnered with Xapien to build the legal market’s first AML due diligence tool powered by a Large Language Model (LLM).
Once integrated, Xapien is expected to clear low-risk clients in hours instead of days. Analysts can focus on higher risk cases, ensuring appropriate AML controls and ongoing monitoring for all clients. The AI-powered tool enriches client risk assessments by gathering data from corporate, AML databases, and the indexed internet through a wide-angle lens.
Xapien is an AI-powered research tool that provides enriched information on any subject, so law firms can adopt a wide-angle lens for client risk assessments. Guided by the General Counsel and a dedicated team of risk and compliance professionals, the tool is being further developed to gather data from more corporate and AML databases.
‘Once Xapien is integrated into the process, the firm expects low-risk clients to be cleared in hours as opposed to days.’
Andrew Cheung
The tool will perform both primary and secondary data collection. It first gathers essential client information, such as registered office addresses, shareholders, directors, and ultimate beneficial owners. It then performs a secondary search across the indexed internet to gather supplemental opensource information.
In around 15 minutes, Xapien will generate a detailed report that identifies AML risks, anti-bribery and corruption (ABC) risks, and environmental, social, and governance (ESG) risks. It will also flag risky connections and associations that manual checks might miss.
Using risk assessment methodologies, Xapien assigns a risk rating to each client. Low-risk clients pass with minimal oversight, while medium-risk cases are reviewed further by the AML team. High-risk cases undergo additional verification based on specific risks, potentially involving a deeper review of the report, consulting with partners, or requesting further client information.
The end goal is for the platform to provide a comprehensive due diligence report that outlines collected data, risk assessment results, any missing information, and a complete picture of the client’s risk profile. The compliance team will then make informed risk-based decisions about next steps.
Xapien enables law firms to take a balanced approach to AML risk management with rapid insights on all clients from the moment they begin the onboarding process. It provides a comprehensive view of risks, enabling your compliance team to tailor the next steps and effectively allocate human resources.
This has transformative consequences for law firms. The reductions in partner time invested in collecting client data, and analyst time in reviewing and cross-referencing data results in millions of pounds worth of savings. Moreover, partners can start billing and serving clients faster. This provides firms with a competitive edge. Finally, the firm is better protected with a comprehensive AML process that remains in line with the risk-based approach.
If you’re interested in hearing more then please get in touch.
Chris Green, CEO, Xapien and Andrew Cheung, General Counsel, Pinsent Masons
Email: comms@xapien.com
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