Pinsent Masons and Xapien release groundbreaking AI tool for AML compliance

London, 18 November 2024 – Multinational law firm Pinsent Masons has announced a pioneering partnership with AI company Xapien to launch the world’s first artificial intelligence tool specifically designed to address Anti-Money Laundering (AML) compliance challenges.

This groundbreaking tool, developed collaboratively by Pinsent Masons and Xapien, reduces client onboarding times from weeks to hours. Using advanced AI technology, it performs comprehensive background research on individuals and companies, analysing data from the entire indexed internet and integrating information from corporate records and screening providers. This enables analysts to swiftly clear low-risk clients, reallocating resources to the more complex task of high-risk client clearance.

The current compliance landscape has three critical challenges: ballooning compliance costs, slow onboarding processes and a disproportionate focus on low and medium-risk clients. Each of these increases risk and reduces income. 

The new AI tool addresses these challenges head-on. It streamlines the AML process from information gathering to report writing and removes the need for back-and-forth requests for information. Analysts can focus on high-risk clients while quickly clearing low-risk ones, improving overall efficiency, risk management, and client experience. 

A key benefit of dramatically improving clearance times with this technology is the speed at which law firms can confirm their ability to act for clients. When clients seek informal quotes from multiple firms, a fast response is highly influential in their decision to instruct a firm. Quick clearances mean firms are not forced to compete on price alone but can differentiate themselves through speed, efficiency, and professionalism. This technological edge enables firms to secure clients more effectively and enhances their market position.

The need for faster, more efficient compliance has never been greater. Global businesses are facing growing compliance costs due to a perfect storm of factors. Conscious consumers now expect ethical conduct and robust supply chain management, driving firms to adopt stricter compliance measures. Global instability from conflicts in Ukraine, the Middle East, and tensions with China has produced unstable regulations. Rapidly expanding sanctions lists impact every part of supply chains, making it essential for organisations to thoroughly vet their third parties. ‘Client onboarding’ has become the more laborious and time-consuming ‘client selection’.

However, the current AML approach is fragmented, human-dependent, and spread across multiple systems, delaying when law firms can start billing clients. Key issues include inconsistent risk assessments, slow partner responses, and incomplete client information. Communications to gather data result in days of delay, disrupting cash flow and extending the period during which billed work remains unpaid. This places firms at financial and regulatory risk as they may prioritise completing work over addressing critical issues like terms of engagement or AML risk assessments.

Additionally, the current process requires equal AML analyst resources for all clients, regardless of risk level. Low-risk clients, who could be quickly cleared, end up draining resources that could be better used on higher-risk matters. This manual review system delays simple clearances as they are queued behind more complex cases. 

Pinsent Masons has been using Xapien for over a year and has found it solves these issues, driving multiple efficiencies and savings in their AML process. Recognising the longer-term potential, they have invested in the co-development partnership to better tailor it for legal AML due diligence clearances. This partnership will include the development of new features, such as consolidated risk assessment and screening reports, aiming to automate a large proportion, if not all, of the AML due diligence process. This development and design work will be done in close collaboration with experts from Pinsent Masons, but the tool will be available to other law firms and AML-regulated businesses.

“We are delighted to partner with Xapien in delivering a cutting-edge solution that addresses significant pain points in AML compliance. This innovation not only streamlines the onboarding process but also ensures a more strategic allocation of resources, enhancing overall risk management.” Andrew Cheung, General Counsel at Pinsent Masons

“There is an increasing need for organisations of any size to truly ‘know’ their third parties – their customers, suppliers, donors, applicants, and investors. Firms no longer simply ask ‘can we’ be in business with someone (a straight compliance question). They ask ‘should we’? This has created a ballooning industry of laborious and time-consuming background research. Our collaboration with Pinsent Masons represents a major advancement in the application of AI to solve these compliance challenges. This tool is set to revolutionise the way firms approach AML, providing a faster, more efficient, and more effective solution to compliance.” Chris Green, CEO at Xapien

About Pinsent Masons

Pinsent Masons is an international law firm with a reputation for delivering innovative and practical solutions. With a focus on collaboration and a commitment to excellence, the firm advises clients on a wide range of legal matters, helping them navigate complex regulatory environments.

About Xapien

Xapien revolutionises due diligence for businesses. Using advanced AI, it automates in-depth background research on individuals and companies by analysing data from the entire indexed internet and integrating information from corporate records and screening providers. This enables the delivery of detailed, evidence-based reports in minutes, significantly faster than traditional methods.

Xapien’s technology enhances efficiency, accuracy, and decision-making across various industries such as finance, insurance, and legal services. The platform quickly assesses regulatory, reputational, and values-led risks, helping organisations streamline compliance, mitigate risks, and uncover new business opportunities.

Focused on transparency and traceability, Xapien ensures all information is fully sourced and verifiable, providing users with the confidence needed to make informed decisions. This innovative approach improves operational efficiency and supports strategic resource allocation, allowing businesses to prioritise higher-risk matters effectively.

For more information, visit xapien.com

For media inquiries, please contact: comms@xapien.com