Proptech Innovator Suggests Incremental Improvements To Legal Technology
Artificial Intelligence (AI), machine learning algorithms, blockchain technology, the rise of online portal facilities and a host of digital resources are currently being embraced by a legal sector tasked with protecting consumers, improving efficiency, reducing the time it takes to complete a legal service and improving the customer experience.
AI and machine learning has been heralded as a way of distributing complex, important and often mundane paperwork to robots. A recent study by LawGeex set a machine-learning AI against 20 human lawyers.
The human lawyers, with decades of experience in corporate law, were tasked with spotting problems in five Non-Disclosure Agreements (NDAs).
It took the lawyers an average of 92 minutes to complete the task. The longest time taken by a human lawyer was 156 minutes, and the shortest time was 51 minutes with an 85% accuracy rate. However, the AI managed the work in just 26 seconds with a 94% accuracy rate.
In addition to the clear efficiency benefits that can be enjoyed through technology, it is also something desired by legal consumers. A recent madigital survey found that 83% would prefer to communicate online than using any other communication method.
Most importantly, as the rise of cyber crime intensifies, technological innovators are looking for ways to protect home buyers and sellers from escalating risks.
The UK Finance report, ‘Fraud the Facts 2019,’ found that authorised push payment fraud increased by 92% last year.
In 2017, 43,875 attempts were made to convince individuals or businesses to part with their money. However, by 2018, as social engineering tactics and impersonation methods become more sophisticated, this number had grown to 84,624.
Unfortunately, the success rate of authorised push payment fraud saw £354.3 million successfully stolen last year. This represents a significant increase from the £236 million extracted in 2017.
Olly Thornton-Berry, co-founder of Thirdfort, has taken the time to explain how Legaltech, AI and a myriad of technology-based solutions are available and being used to protect consumers, improve the customer journey, reduce conveyancing times, improve efficiency and free up legal service providers to complete more complex legal work.
How is technology being used in the conveyancing sector to protect the consumer?
Existing solutions to protect consumers are mostly email based. Large, bold and red capital letters are inserted into the bottom of email correspondence to flag how bank account details will not change throughout the transaction and to ignore any email purporting to say details are different.
The challenge with this is many consumers are wholly unaware email interception even exists. Due to clients’ continuous eagerness to progress matters quickly, the concept of a fraudster impersonating their conveyancer to misdirect payments is frequently overlooked.
Technology has a big part to play in mitigating against this problem. A near term solution would be removing e-mail as the medium through which bank account details are shared. Mobile Apps for example, are significantly harder to hack compared to e-mail or web browsers (for reasons I’ll save for another time). We therefore see App based validation of bank account details as the way forwards.
As people are increasingly choosing to do things on mobile, any App used in conveyancing should educate clients as to the risk of fraud and what to watch out for.
Why is it important for conveyancers to embrace technology and how will it improve their business and enable them to remain compliant?
Conveyancers are rightly frustrated to be repeatedly told that technology, technology and more technology can be the solution to all their problems. What we need are actual solutions to real problems rather than endless buzzwords and technological evangelists preaching ideas disconnected from conveyancing reality.
No industry changes over night. What is needed is incremental improvements rather than forced industry overhaul. A near-term opportunity for improvement is the early engagement between client and lawyer where admin can be cut, risk reduced, and time saved. Available technology can facilitate these benefits, enabling lawyers to give great service as well as handle more cases.
What role can artificial intelligence play in improving things like digital conveyancing or cyber security?
I personally find ‘artificial intelligence’ being too loosely used when it comes to conveyancing. We are a long time away from robots taking over the conveyancing process. As it is an emotional journey for the client, the legal judgement and variable expertise needed cannot be solved using AI. I believe conveyancers will continue to be integral to the process; the opportunity for AI lies in streamlining some of the repetitive, manually intensive parts of the process.
For instance, ID verification and source of funds are undertaken multiple times from scratch (the mortgage adviser performs similar analysis to the source of funds checks to judge affordability).
To do this, clients send certified ID documents for the conveyancer to ‘approve’. However, in this age of high criminal sophistication, fakes and manipulated ID documents are very difficult to spot, even for experts. Now consider Machine Learning (a type of AI), in which a computer is ‘trained’ to spot minute details indicating if a document has been tampered with or is a fake. The AI has consistently outperformed forensic experts in flagging fakes, resulting in this technology being widely used in financial services and therefore banks (such as Barclays) to open bank accounts.
This type of AI (called document scanning and facial recognition) is exciting because it not only materially enhances a conveyancer’s ability to reliably identify their client but is quicker and more convenient for both the client and conveyancer.
Why is moving to digital conveyancing proving a risk for the sector? Can conveyancers mitigate this risk?
It’s inevitable that conveyancers will have less and less physical interaction with their clients as the shift continues in the expectation to do more on mobile phones.
One of the biggest risks of not seeing clients is knowing they are not impersonating an owner (property hijacking). Fraudsters are becoming increasingly sophisticated and attempt to exploit this trend, while looking for firms that rely on the paper based, out-dated systems of KYC. It is essential that conveyancers use the best digital identity tools (such as App based communication, facial recognition and document scanning technology) to meet the client expectation of digital while reducing the risk of impersonation, money laundering or Friday Afternoon Fraud.
Such an approach will mitigate the risk of being exposed to fraudsters in a conveyancing process that becomes increasingly digital.
How do you think technology will develop in the future and what role will it play in Conveyancing?
I think technology will improve processes incrementally rather than giant step changes promised by ‘platforms’. The innovator’s priority should be solving tangible problems whilst reducing risk.
Conveyancing is administratively intensive and there could be greater visibility for parties involved. These are key ingredients innovators enjoy seeing as a starting point as there’s usually appetite from the industry to collaboratively explore how technology could begin improving things, one step at a time.