Author Sara Singh Tak, Data Zoo Marketing Specialist
Digitalisation has boomed in 2020 with 4.54 billion people using the internet, which is nearly 60% of the world’s population. With digitalisation there is a risk of fraud in the industry, in particular identity fraud. Identity fraud occurs when someone uses your personal identification without your permission to commit a crime or fraud. Personal identity is very important and valuable as they are the credentials that will be asked by any government agency or company these include an individual’s full name, date of birth, place of birth, current address, or numbers attached to your bank account.
In the past, nearly $209 million in New Zealand and $3.1 billion in Australia is lost in identity crimes, taking a heavy toll on the economy. According to research, one in six New Zealanders and one in four Australians face identity crimes. Identity theft is a crime that is difficult to prosecute people for (it may have been committed overseas or online) and it can also take a long time to resolve. The rising numbers are a concern for the economy as people tend to place too much trust in others, making these countries a soft target making Verification of Identity (VOI) a necessity.
Identity verification is a common practice among many industries but is considered a laborious task. In the legal industry, lawyers need to conduct a VOI for their clients to ensure they are providing advice only to bona fide clients whose identity can be reliably ascertained.
How to protect your firm
Identity fraud is a serious issue that is on a rise around the world and New Zealand has seen growing numbers in the past years. In an attempt to prevent fraud there are formalised requirements for VOI across firms. VOI is not just about complying with regulations but also the protection of the firms and it’s clients. Being exposed to fraud can affect your firm in the form of financial losses, reputational damage, regulatory penalties and legal actions.
Verification of Identity (VOI) is an identification process that supports the e-Conveyancing compliance framework, a process carried out to ensure that a person is who he claims to be. In New Zealand and Australia to prove your identity for VOI, you can use one of the documents: your country Passport, birth certificate of citizens, immigration documents, or driving license.
It is a requirement for any person (including corporations) involved in a property purchase or sale to undergo Verification of Identity (VOI) and to provide a Client Authorisation to their legal representative for the purposes of registration of documents and the assessment of stamp duty.
The in-person verification method has been affected due to the social distancing guidelines across the globe along with digitalisation giving way to easy online verification systems. Data Zoo is an expert in quick and remote verification solutions for your clients and firm that will enable them to submit the necessary proof of identity through a link sent to them. Data Zoo’s identity verification system provides a one-stop solution, verifying their identity along with running a PEP’s and Sanctions check.
Three layers of VOI
1. Government document verification
The Document Verification Services (DVS) in Australia and the Department of Internal Affairs (DIA) in New Zealand offer the ability to match government-issued identity documents directly with the government organisation that issued them. Government document verification provides extensive coverage and high match rates.
2. Recognition and liveness
Facial recognition helps minimise customer friction and prevent fraud through users performing a live selfie or video and comparing it to their photo identity document.
3. Optical Character Recognition (OCR)
OCR is a tool that digitises an individual’s identity document. By digitally extracting the text, it increases the accuracy of gathering the required information as there is no manual data entry – saving you time and money.
After the document verification, it is safe to classify if the clients are genuine or fraudulent saving firms or organisations time, effort and money through simple steps of VOI. VOI provides lawyers security from reliable sources to continue their businesses with a client.
In recent times, the Australian and New Zealand’s legal industry has seen the start of the legal technology’s renaissance where tech is growing rapidly in the industry to meet the growing trends in the market.
Some of the trends that have emerged in the legal industry are:
1. Importance of Know Your Customer:
Know Your Customers (KYC) is the process of identifying your customers and verifying their details to comply with national and global regulations, including anti-money laundering and counter-terrorism financing laws. Organisations and institutions across various industries will require electronic identity verification to know who they are dealing with to ensure they comply with their national and global regulations. The institutions are required to comply with KYC regulations to verify their customers and their provided documents to avoid money laundering, identity theft, financial fraud, and criminal organisations’ financing. More organisations are adopting electronic identity verification as an integral step for dealing with customers.
With the current trends and latest innovations, Data Zoo is an ideal solution for many legal firms with AML/KYC obligations across the globe. With access to all government and commercial sources – covering over 95% of the New Zealand and Australian population. Instantly verify your customers through reliable and independent data sources & meet all compliance requirements along with optical character recognition (OCR).
Know Your Customer (KYC) has been a mandate in reporting entities and now the legal industry focusing on know your clients before partnering. It is not just about verifying your customer’s identification but overall Enhanced due diligence through PEPs and sanctions screening to avoid facing any legal issues with the AML laws. In mid-July, the Australian Financial Review reported that ASIC was investigating a group of people for the identity theft of 33 victims and setting up fake trading and bank accounts to steal $2.44 million in shares.
2. Work differently with the use of tech
Work from home or remote working has been popularised in the past year to adapt to the ongoing requirement of social distancing and lockdown. Businesses needed to quickly adapt to change to continue their functioning online through the advancing tech. The nature of regular contact with clients in the legal industry has resulted in technological advancement for continuous communication and flexibility of operations. If you’re still harbouring a fear of cloud-based services, even as consumer demand compels technology adoption, it’s time to re-evaluate. Paper-based law offices and on-site servers no longer cut it as secure options. Moreover, law firms positioning themselves as secure data repositories retain a potentially significant advantage over their competitors. Both you and your clients will gain peace of mind through adopting a cloud solution that meets the most stringent security standards for the legal industry.
Traditionally, the paperwork and other activities were done manually but with the tech advancement, law firms are focusing more on billable activities for higher profits. The manual work has been overtaken by automated systems making the work more efficient and time-saving. Time is money for any organisation, if a task can speed up with the use of tech then the switch is necessary, realising the importance of digital transformation for surviving and thriving in these uncertain times. Kodak and Lego are use cases of organisations that did not adapt to the changing environment which cost them a heavy price and losing their market position as well with new innovative entrants in the market.
Technologies should be adopted in light of a firm’s business model. Law firms can invest in new technologies that improve their offering and customer service, transform a firm’s value proposition, and increase profit margins. 31% of New Zealand’s legal tech companies have indicated they have raised funds in 2020 and Australian research tracks $367.85 million investment in the countries legal tech market, promoting technological and digital advancement in legal operations.
“I do think that it’s the ability to leverage technology that makes all the difference and it is enabling us to work differently and in ways that are better for the clients, better for the lawyers, and better for the world. It’s really a great time to be a lawyer.”
– Lori Beight, Partner, Cascade Legal Planning
3. Global Legal Markets
Globalisation has faded the boundaries, allowing domestic companies to expand their client sources and build a name in the market. In recent years, the legal industry is also eliminating boundaries by acquiring clients across their national borders. As important it is for a legal company to acquire global clients for a wider reach, it is also important to verify them through the process to avoid any AML law breaches and CTF’s. Protection from the negative global reputation of the company and monetary losses.
77% of the New Zealand legal markets have scope for legal expansion across the world due to the 2020 legal technological advancement.
Integrating these legal trends with tech and innovation can be met at LawFest 2021.
LawFest is the legal technology and innovation conference of the year that attracts legal professionals from across the country, and abroad. If you want to learn how to adapt and thrive in an industry that’s facing considerable change and explore opportunities to adapt how you deliver legal services for today and the future.
The one-day conference provides a platform to learn how to innovate and adopt technology, connect with innovators in the legal industry, establish relationships, and discover technology that matters to you and your organisations.
Grab your ticket for LAWFEST 2021 and catch Data Zoo there: https://www.lawfest.nz/
Data Zoo is the best solution for any organisations with AML/KYC obligations. With access to more than 5 billion individuals globally, we are the leading Asia Pacific provider – covering over 95% of the population. Instantly verify your customers through reliable and independent data sources & meet all compliance requirements. If you would like to learn more, please contact us here.