Property professionals may find it hard to decide where to draw the line between human and machine when meeting compliance requirements. What are the risks of adopting new technology against manual methods?

What should be automated, and where should technology augment human decision-making?

Automation vs augmentation 

First, what is automation and augmentation?

Automation is where technology fully replaces human decision-making and actions. Augmentation, on the other hand, uses technology to support and enhance human decision-making and actions.

Some of the most effective technologies available today complement human capabilities. Such technology can help us identify potential risks and act more quickly. Technology cannot replace the value that humans bring, but when used correctly, it can enhance efficiency and provide additional safeguards.

When used for anti-money laundering, technology can help to prevent financial crime, reducing admin time by eliminating low-value manual processes and minimising reliance on human control, which reduces bias and human error.

Technology can also help to increase consistency in internal controls, creating clear audit trails – essential should property professionals need to report or investigate money laundering or fraud.

What is available today?

Many technologies augment compliance, helping property professionals tackle economic crime and meet regulatory requirements.

For instance, digital identity verification tools have transformed customer due diligence. Such technology reduces time spent and improves the client experience while enhancing protection for businesses and clients.

Meanwhile, screening technology, which helps property professionals increase the reach and quality of the data they can access, reduces the manual burden when understanding potential client risks.

In addition, source of funds identification and verification technology collects and provides crucial information about client funds. Advances in SoF technology are helping to eliminate the risk of tampering and interception while providing increased security and accuracy with corroborated sources, better user experience, and more accessible reports.

Understanding the risks 

Traditional methods of undertaking client due diligence predominantly rely on a manual approach. However, we can all be misled, make mistakes, and fall victim to fraud.

If using a manual method, property professionals risk exposing themselves to several risks, such as high-quality fake documents, lack of data and sources to verify information, difficulties evidencing controls and compliance processes, bias and inconsistency, and human error. Sophisticated criminals will take advantage of such weaknesses.

However, a digital-only approach also has its risks.

For instance, firms may become over-reliant on tech and fail to conduct due diligence properly.

Second, property professionals must read and review the results. But, if property professionals misinterpreted those results, the firm may be non-compliant. Professionals must be familiar with the system to understand the results. A lack of understanding may mean failing to meet compliance requirements.

And every technology comes with data protection concerns.

Mitigating the risks

While using technology has challenges, simple steps can reduce the risks.

Property professionals can mitigate against over-reliance by utilising peer-to-peer reviews and audits. Property firms can enhance understanding through training. Firms can also enhance data security by choosing a technology provider that meets industry and regulator standards.

The winning combination  

It is unlikely AML processes will be fully automated due to its nature and complexity.

However, innovation and the drive to reduce costly manual practices are leading to greater technology adoption.

Conveyancers and estate agents should augment and redesign AML workflows to incorporate technology that can help enhance their capabilities and improve decision-making in an increasingly competitive environment.

Harriet Holmes is AML services manager at client compliance platform Thirdfort