You need to demonstrate your compliance with the CQS Core Practice Management Standards. Make evidencing your onboarding compliance easier with eCOS from InfoTrack.
5 ways to support CQS compliance with eCOS
Compliance is key for law firms and the Core Practice Management Standards are designed to protect both you and your clients. Using technology that can demonstrate you’re meeting these standards can make your CQS assessment smoother with easily documented evidence that you’re adhering to the policies and procedures you’ve prepared.
In this guide, we review what CQS is, the most common areas of non-compliance related to client onboarding, and ways you can better meet your CQS requirements with eCOS.
What is CQS?
The Conveyancing Quality Scheme (CQS) is a recognised quality standard for residential conveyancing practices initiated by the Law Society. It was designed to minimise risk for you and your clients, protecting your brand’s reputation by showcasing expertise and quality of service.
Impartial CQS assessors carry out onsite assessments with firms, reviewing key documents, policies, practices, and procedures to measure the extent to which that firm complies with the standards.
The Core Practice Management Standards (CPMS) were updated on 1st May 2022, with an additional chapter, rising from six to seven, and individual requirements increasing to 40 from the previous 36. Updates were made to all sections of the CPMS apart from ‘Structure and Strategy’ and ‘Financial Management’.
This means that firms who adhere to CQS accreditation must familiarise themselves with the changes and ensure they are doing everything they can to meet the requirements. Regular review of your processes is recommended and taking stock of the changes to assess whether you need to make changes is crucial.
For complete guidance on the Core Practice Management Standards, access them here.
Most common areas of CQS non-compliance related to onboarding
CQS Lead Assessor, Tracy Thompson, recently partnered with us on a webinar series and shares some of the most common pitfalls law firms face when it comes to non-compliance during the CQS assessment. Several of those specifically relate to the client onboarding process.
Financial verification procedures
There are several financial processes involved with conveyancing, some more regularly failing to be documented correctly by law firms. This is leading to those firms receiving non-compliance notices. The most common of these is checking the bank accounts of other parties and their procedure for authorising paying out funds.
Most firms don’t act for clients from high-risk third countries, however if their client is based in the UK with funds coming from a high-risk third country, that is something that needs to be reviewed and documented when completing the AML risk assessment.
AML and source of wealth
Many firms aren’t conducting an up-to-date practice-wide AML risk assessment. Changes in the Legal Sector Affinity Group (LSAG) guidance was updated in 2022 and firms should have made amendments to their policies following that decision. This is especially pertinent to the current sanctions due to the Russia Ukraine conflict.
Additionally, Tracy has seen that firms aren’t documenting their source of wealth checks or having independent AML audits. The general guidance is that unless you are a sole practitioner, the SRA expectation is to have an external audit process. Having an assigned MLRO at the firm is also recommended.
How to demonstrate CQS Compliance
Tracy Thompson shares her three-step process for evidencing that you are taking all reasonable steps to support your compliance.
1. Say as you do
Ensure you have documented policies and procedures in place.
2. Do as you say
Make sure those policies are being followed by all stakeholders.
3. Provide evidence
Make sure everybody knows how the standard is being complied with and can demonstrate it.
Technology can significantly impact how easy it is to provide evidence and document the procedures and policies. Digital audit trails save time and simplify the process of preparing evidence for the assessor.
5 ways eCOS can support your CQS compliance
eCOS currently supports CQS standards across four chapters of the CPMS; Financial Management, Risk Management, Client Care, and File and Case Management. An all-in-one digital onboarding solution, eCOS encompasses onboarding and property information forms, client care letters, digital verification of identity and funds, one-click AML, and embedded eSignature technology.
Using eCOS can help you to easily prove you’re meeting your CQS obligations in the following ways.
1. One-click AML Checks
You should include an up-to-date anti-money laundering firm-wide risk assessment. With ongoing risks related to trends in cryptocurrency and the Russia Ukraine conflict, there must be emphasis on mitigating fraud risk.
Within eCOS, you can order your AML in just one click using data already contained in your matter. One-click AML within eCOS uses data taken from the ID check process to provide faster, more reliable AML checks against that identity including PEPs and sanctions, with ongoing monitoring at no extra cost.
This process adds an additional layer of confidence that the ID has been verified to better protect your business from high-risk individuals and the fines that are attributed to insufficient due diligence related to them.
2. Open Banking with Verification of Funds
Source of funds checks are a key task during the due diligence process and often involve the manual analysis of financial statements. With eCOS, you can access an accurate reflection of your clients’ financial situation at the time of purchase by obtaining a source of funds, proof of funds, and source of wealth check all within one convenient report.
Using Open Banking technology, InfoTrack removes the need for PDF statements, using real-time data to deliver a complete overview of your clients’ financial situation. Open Banking technology means you can trust the authenticity of the information provided with confidence your client’s data is secure.
The report will also flag risks or inconsistencies in the information provided so you can easily identify where further investigation may be required – supporting your overall risk management process.
3. One dashboard for complete visibility over client onboarding
Having complete visibility over the progress of your client onboarding can keep you on top of the process as well as helping your clients through anything they need clarification on. With all crucial onboarding tasks access through a single portal, it’s easier to stay on track with getting the information you need.
eCOS includes client care letters, TA forms, digital ID checks, and verification of funds, as well as AML all in one place. With a dashboard to conveniently track all matters and see the progress of your client’s information completion, you can streamline the onboarding process.
A dedicated portal for your client also simplifies how they provide information, whether via a web or mobile app journey. With research from OneID and DocuSign identifying that 11 percent of home buyers lose a days’ worth of working time due to having to complete tasks in person, it’s another reason to switch to digital onboarding.
4. Better risk management with digital ID checks, TA forms, and eSignatures
Chapter 5 of the CPMS outlines the requirements for risk management and is the most extensive section. Containing 17 assessment areas, there is a substantial amount of information to review.
Several of the assessment areas within the risk management chapter relate to AML and the prevention of property fraud. eCOS makes evidencing you are taking all reasonable steps to minimise risk by providing secure, accessible tools that are designed to obtain the information you need from your client to assess the risk level.
Biometric ID technology is more accurate than manual checks, using multiple data points to match the ID with the person. Using the same biometric identity technology that is trusted by leading global organisations including Barclays, HSBC, The Home Office, and more, we’re helping firms confidently verify more than 20,000 identities every month.
Similarly, eSignature technology is continuing to be more widely accepted by authorities and lenders including HMLR and Nationwide. With added layers of security including a certificate of completion and tamper seals, eSignatures provide an electronic record with information such as the time and IP address of the signer.
Risk isn’t just related to fraud though, there’s also the risk that information is missing or incomplete. With eCOS, property information forms including the TA6, TA7, and TA10 cannot be submitted by your client until all required information has been entered. Unlike printed and posted forms or emailed PDFs, eCOS ensures you get all the information you need up front.
5. Secure and manageable client communication
The CPMS clearly sets out how law firms must manage client care under chapter 6. Using eCOS addresses several requirements in this assessment area. Using eCOS improves accessibility to onboarding information with a secure, user-friendly portal.
Sending your client care letters, TA forms, and obtaining eSignatures for relevant documents is all built into eCOS, making management of client communication from instruction easy. From explaining essential information including likely timescales of the transactions and explaining when a lender is a client to your clients, ensuring you can communicate everything effectively is easy with eCOS.
When using the eCOS and Perfect Portal integration, firms can also address the requirement related to providing updates on the progress of a transaction. Supported by an app, notifications are sent to clients to provide key stage updates throughout the transaction.
eCOS gives you the tools you need to onboard your clients fast and effectively, all while helping you maintain your CQS compliance. Get in touch with us today to see how you can make demonstrating CQS compliance easier.