Client Acceptance for Client Acceptance

We have several clients who use Alacra’s tools and licensed content for client acceptance purposes – vetting new accounts and conducting enhanced or continuing due diligence on other accounts.  This work often requires a background check on the principals of a firm and, although Alacra does not carry these databases, customers sometimes use either LexisNexis, ChoicePoint or West to do these checks. Who and how these databases are used is going to change.  Given last week’s LexisNexis security breach I think the first step will be that the vendors of this type of information will have to conduct some sort of  customer identification procedure on all purchasers of this type of information.  Who can get access to this information will be limited by  the vendors.

ChoicePoint has already hired a Chief Credentialing, Compliance and Privacy Officer.  While Outsell believes the industry won’t be limited in how they collect this information, how they’re able to sell it is a different matter entirely.  The vendors will fight it but the privacy laws in the US are going to get tougher and tougher over the next couple of years.