The Anti-Money Laundering and Counter-Terrorism Financing Act passed on December 12 2007 no longer requires financial institutions to keep an account holder's signature on file.ING Direct is the only financial institution operating in Australia that has chosen to do away with signature-based identification, with banking and finance lawyers Gadens supporting the move by taking the position holding a signature on file does not mitigate risk."I don't think it's riskier at all, not holding a signature on file", said Vicki Grey, a partner at Gadens."It's a different way of identifying someone, but it is not a more risky way at all."I don't actually think that the 100 point check and holding a signature on file was ever really a very good way at avoiding fraud in any case. It was always quite easy to prove 100 points."I think now what we are replacing that with is a different arrangement, and the arrangement now is to identify people with a whole raft of things, which doesn't necessarily include a signature, but questions, background checks and other information that might be available."I don't think in any way it's riskier at all, and in some ways - possibly less risky". FCS Online is one software vendor providing an interface for financial institutions to conduct an online risk-based assessment of new customer accounts, checking public databases such as telephone directories, electoral rolls and anti-money laundering warning lists held by the Australian and US governments.Some institutions, such as Raboplus, which implemented the risk-based analysis software when the AML Act was passed six months ago, still request that customers provide a signed application, as a risk management tool.Tony Fitzgibbon, chief executive officer for FCS Online, said around twenty financial institutions operating in Australia have already implemented the risk-based assessment software, with as many as another 50 either in talks or trialling the software.FCS charges between fifty cents and two dollars per search conducted on a new potential bank customer."The power behind the system is the databases, and we have hundreds of millions of records. A client then determines what they want to use as part of their risk assessment in their AML solution."Bryan Inch, general manager Raboplus, said the application is a very efficient process, with the Dutch owned bank establishing FCS Online risk-based software within a week of the AML Act.Grey continues by saying risk mitigation is a whole package, not just a signature."My understanding, and we don't advise ING on this, but my view would be that there are other ways of coming up with equally valid risk mitigation policies when you look at the overall strategy."It might be one element being used by some banks (signatures), but I don't think it's the only valid element, and I think it would be possible - very possible - to build a strategy around something that didn't include a signature at all for risk mitigation purposes."What you will find interestingly enough is that many of the major banks are still in fact using (signatures) as their method