Sarah Abood

The Financial Advice Association Australia (FAAA) has launched a new initiative to help financial advisers meet their AML/CTF obligations.  FAAA SafeID is a digital client identification tool that will transform the way advisers identify and verify their clients for anti-money laundering (AML) and counter-terrorism (CTF) purposes.

Sarah Abood, FAAA CEO, says: “We know how challenging and frustrating client identification can be for our members, and we’ve listened closely to those concerns. We created FAAA SafeID as a comprehensive solution designed to simplify client identification and verification for financial advisers, delivering real value and peace of mind for our members.

“When a client is verified by an adviser using FAAA SafeID, they can be confident that their ID and personal data is protected and identity checks will be managed in line with AUSTRAC requirements.” 

Ms Abood says the advantages of FAAA SafeID are:

• Advisers can identify and verify clients face to face or remotely using a secure link. 
• Electronic verification requires only minimal details which are checked against a range of digital databases so that the client’s identity can be matched with confidence.
• The risk of identity theft is reduced. There is no need to save copies of ID for electronic verification. (If copies of ID are required for manual verification, they can be saved in the secure platform.)
• The FAAA SafeID platform guides advisers to manage other AUSTRAC requirements such as AML/CTF risk assessment and record-keeping in a secure and auditable environment.
• Advisers can conduct PEP, Sanctions and other checks and record the details of any Enhanced Due Diligence measures taken to manage risk.

Ms Abood says the FAAA acts as an enterprise buyer for FAAA SafeID, making scale benefits available to the 6,000 or so financial advice practices in Australia.  Practices with FAAA members receive preferential pricing, based on the proportion of FAAA members in a practice.

Technology and support for FAAA SafeID is managed by financial crime prevention experts KordaMentha.  

Alice Saveneh-Murray, partner, financial crime and implementation services with KordaMentha, says the focus has been on providing a system that is compliant by design, robust and secure.

“SafeID marks a turning point for the advice industry. By combining the FAAA’s industry insight with KordaMentha’s leadership in AML/CTF and managed services, we’ve created a platform that’s fit for purpose and future-proof. Advisers who join this platform will have the advantage against those still relying on paper forms and manual processes that are vulnerable to cyber exploitation.”

The FAAA SafeID underlying technology providers are Vigilance AML, an experienced technology provider in the highly regulated AML/CTF compliance space, and FrankieOne, a leading RegTech company that provides a gateway into a global ecosystem of identity verification, KYC, and fraud prevention solutions.  Providers are ISO 27001:2022 and SOC 2 type 2 compliant, and data is held on Australian servers.

Ms Abood acknowledges one challenge will be product provider acceptance of this new technology, as they often rely on advisers to conduct client identification and verification using their own systems.

“For example, currently some providers require certified copies of client ID, often requested as pdf attachments to email,” Ms Abood says. “This practice is both unnecessary and potentially unsafe for clients. 

“AUSTRAC has been very clear that it does not require advisers to retain copies of client identity documents themselves. Rather they must keep a record of what steps were taken to identify the client. 

“We are in ongoing discussions with the FSC, with whom the FAAA jointly developed the AML/CTF forms that have been used by advisers for the better part of two decades.  With AUSTRAC’S recognition of regtech solutions, it’s time for a better way.

“We are calling on product providers to step up and accept a safer, digital solution where advisers can provide evidence of verification undertaken while safeguarding client privacy,” Ms Abood says.

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