Conflicts and KYC Checks with AI: Faster Searches, Human Decisions

Conflicts and KYC checks are where risk, ethics and client service collide.

AI will not replace conflicts or compliance teams. Used well, it can:

search more data, more quickly;
present results in clearer ways;
reduce repetitive manual work.

Used badly, it can bury important signals or create a false sense of comfort.

This article looks at how AI can support conflicts and KYC in UK firms, while keeping:

final decisions firmly with humans; and
regulators and clients comfortable with your approach.

1. Conflicts: what are you actually trying to decide?

In conflicts, the core questions remain:

Do we have existing or recent relationships that clash with this new instruction?
Are there duties of confidentiality or loyalty that would be compromised?
Even if formally permissible, is acting commercially or reputationally sensible?

AI can help at the information-gathering and summarisation stages:

searching names, entities and matters;
grouping related hits;
highlighting potential links for human review.

It should not:

decide that a conflict “does not matter”;
downgrade alerts to fit capacity or revenue goals.

2. AI in conflicts searches: practical uses

Common pain points include:

inconsistent naming of clients and counterparties;
multiple systems (case management, billing, CRM) with overlapping but incomplete data;
free-text fields that are hard to search.

AI-powered search can:

normalise names and spot near-matches (“ABC Limited” vs “ABC Ltd” vs trading names);
suggest that apparently different entities are linked (subsidiaries, group structures, common directors);
cluster matters by counterparty or sector.

For example, a conflicts assistant might see:

“Show me all matters in the last 10 years involving this corporate group or any entity with these directors.”
“Summarise our past work for this group in 10 lines for the COLP.”

But any positive hits should go to a human conflicts review, not straight to “clear”.

3. KYC: where AI helps most

KYC and CDD processes involve:

collecting documents (ID, proof of address, corporate structure charts, accounts);
verifying information;
assessing risk factors (jurisdiction, PEP status, source of funds).

AI can assist with:

extracting names, dates of birth, addresses and document numbers from ID documents;
checking consistency of information across forms and documents;
summarising risk factors from open-source material or third-party reports;
drafting narrative sections of KYC records (“Client is a UK company owned by… operating in…”).

Again, it should be treated as assistant, not adjudicator.

4. Guardrails for AI-assisted KYC

Because KYC is tightly regulated and may involve high-risk clients:

ensure that third-party data sources and AI tools comply with data protection and financial crime regulations;
avoid sending sensitive documents to unapproved or consumer-grade tools;
make sure you understand where data is processed and stored.

Internally, sensible rules include:

KYC risk ratings are always set by trained humans, based on clearly documented criteria;
AI suggestions are recorded as such (“AI summary of open-source media – reviewed by X on [date]”);
any uncertainty or inconsistency is escalated, not glossed over.

AI should make it easier to spot red flags, not easier to ignore them.

5. Explaining AI use to regulators and banks

Clients, banks and regulators increasingly ask how firms:

manage conflicts;
run KYC and AML checks;
use technology.

When describing AI, emphasise that:

the technology improves search and summarisation;
human compliance staff retain control of decisions;
tools operate within a governed environment (contracts, DPAs, access controls, logging).

It can help to maintain:

written procedures that mention AI explicitly;
training materials for conflicts/KYC teams;
records of audits or quality checks on AI-assisted work.

6. Records, audit and “showing your working”

In both conflicts and KYC, you may later need to show:

why an instruction was accepted or declined;
how a particular risk was assessed;
what information you had at the time.

AI should make this easier, not harder.

That means:

saving search queries, results and AI-generated summaries into the relevant file;
recording who reviewed and decided;
updating records if new information emerges (for example, a client becomes a PEP).

Supervisors can then carry out spot checks and refine prompts and procedures over time.

Where OrdoLux fits

OrdoLux is being designed with conflicts and KYC workflows in mind:

matters, clients and contacts live in a structured database that AI can search more intelligently than free-text systems;
AI-assisted search and summarisation can support conflicts and KYC teams without taking decisions away from them;
search logs, summaries and decisions can be stored in one place, giving a clear audit trail for regulators, banks and insurers.

The goal is to make good decisions faster, not to hand judgment to a black box.

This article is general information for practitioners — not legal or regulatory advice on conflicts, KYC or AML.

Looking for legal case management software?

OrdoLux is legal case management software for UK solicitors, designed to make matter management, documents, time recording and AI assistance feel like one joined-up system. Learn more on the OrdoLux website.