Corporate Service Providers

Business Case Description

For Corporate Services Providers (CSP), Consolidity began digitising and automating the following services: company incorporation, application to the Malta Visa Residency Program, Gaming and Financial Services Licenses, and Asset Registration. In each process, Consolidity tackles its duties by performing the following assignments: gathering and handling of customer data; Screening (risk assessment, AML/CFT sanctions checks, user profiling); dynamic – enhanced and abridged – Due Diligence (KYC and IDV), and Account Management (drafting, handling of forms and their reviews with customers, audit trail, chat and electronic signatures).

Here, we will focus on the first process the smart back-office was made for, i.e. the company incorporation. By breaking down every corporate, commercial, shipping and financial service process a law firm supplies to its customers, we define their root as an essential set of repetitive standardised tasks. These tasks allow for very low variance since they are determined by a supervisory competent national and/or international authority. Most of these services follow identical patterns for the first two assignment categories and differ mostly on the account management part. The first two assignments we will describe are mainly valid for the various processes, while only the templates used to automate the document generation, and few account management tasks differ across them.

01. The Challenge

Paper, emails, copy & paste.
  1. The slow and tedious onboarding process.
  2. Dependency on the paper-based approach – not suitable for competitiveness in international business anymore.
  3. High redundancy of customer data pasting into database and templates.
  4. High use of emails and confusing threads with customer
  5. Significant challenges to increase business capacity.
  6. There is very few automation yet for standardised and repetitive tasks.
  7. A high rate of false-positive into AML/CFT sanctions checks.

02. Previous Approach

Slow, ineffective, outdated.

When the law firm engages with a new client, there is a personal meeting with the client to discuss her requests and ask the preliminary question to know her better. If the law firm is satisfied by the client profile, the relationship will proceed, and the client will receive by email a PDF onboarding form she must complete. Upon completion, she sends it back to her corresponding lawyer by attaching it to an email, and the lawyer will copy and paste her data into the law firm CRM/database.

Based on her data, the lawyer initiates the screening of her profile performing the customer risk assessment. Risk assessment is carried out manually, on an excel sheet, selecting a score for each risk field within every category, matching the client data to the law firm risk matrices. At the same time, the lawyer checks the client against sanctions and AML/CFT databases by copy and paste the name, surname and date of birth of the client into the search engine of a web-based third-party provider portal. Through a risk-based approach, the lawyer defines the client profile and may now request the client her KYC documentation accordingly.

The lawyer receives the documentation via email, often bit by bit, making the process very inefficient and time-consuming to keep track and diligently respond to the client. In the meantime, the lawyer proceeds with the official forms and various contracts/letters/different authorisation letters and the M&A) by copying and pasting the client’s data into the ad-hoc templates. Once all the bureaucracy is completed and signed by the client, the lawyer may send by post the entire client file to the Registry of Companies (ROC).

Upon approval of the ROC, the lawyer notifies the client and may now get ready to abide by any new client’s requests when she needs to make a corporate change. Besides, the lawyer must keep track of any compliance and reporting duty to report in due time to the ROC and the supervisory Authority at specific times throughout the rolling year (ongoing monitoring, annual return and yearly audit). These duties increase linearly with the number of clients’ companies and could quickly get out of hands if the law firm doesn’t exercise persistent procedures.

03.  Solution

Digital, automated, remote.

Consolidity does not modify or edit the existing process in any way but rather mimic it digitally to optimise most of its components. To on-board the new client, the lawyer will send her a link. The link will direct the client into the digital back office of the law firm powered by Consolidity. We tailor the back-office to the law firm design and colours. In fact, the client will not feel to like entering a third-party software but the law firm’s own website.

First, the client will register herself solely with an email and a new password and activate, at will, a 2-factor authentication method. The client is then guided step by step, field by field, into each stage of the onboarding form. Each of these fields turns customer data into metadata subsequently used to automate and optimise the essential tasks. Each field may have a validation rule (i.e. the date inserted is incorrect because the subject person must be older than 18 or the number of shares inserted is too low because by law the minimum share capital in Malta is €1,200) to limit data entry mistakes and avoid losing precious time.

Upon completion of the digital onboarding form, the client reaches a halt stage, and the lawyer gets notified. In the background, Consolidity’s smart engine has checked the client against AML/CFT databases thanks to a third-party API, performed the risk assessment following the law firm’s exact risk appetite and has then profiled the client. While the lawyer approves the new client data and profile, she can now verify her identity by video chat following the FATF guidelines. Upon approval, the client gains access to her document library where KYC is automatically requested according to her profile. The client can download the forms and contracts auto-generated by the smart back office, print and sign them and upload them. She can, at a glance, drag&drop documents to upload required KYC documentation. In jurisdictions allowing electronic signatures, users can electronically sign documents, eliminating the need to print documents.

The client and her dedicated lawyer can now relate through their efficiency dashboard where every interaction is made simple through meaningful notifications and intuitive statuses. No need for email anymore nor copy&paste. If a one-off document must be required, the lawyer can request it by clicking a button while the client gets notified and access every detail of it.

Through their efficiency dashboard, clients may access any module to request a new service or request a change for their company. Clients must fill in only the extra field needed to perform that change. At the same time, the engine generates the necessary notification form, present a new risk assessment and later request the set of required documents

04.  Why Consolidity

RegTech, efficient, innovative.
  1. Benefit from Automation to streamline standard and repetitive tasks to save time.
  2. Wave goodbye to copy&paste and lengthy confusing email threads.
  3. Benefit from meaningful notifications and intuitive statuses.
  4. Eliminate typos.
  5. Increase capacity at a lower cost.

05.  Implemented Software

APIs, cloud, modular.
  1. Company Incorporation; MVRP application; Financial services licenses application.
  2. Module to request any change in company governance.
  3. Admin dashboard for each law firm
  4. Risk assessment tool.
  5. Integration of LexisNexis to automate AML checks.
  6. Consolidity API to connect to transfer all customer data and generated document into on-premises databases.