The need to Know-Your-Customer is increasing. As is the challenge to implement processes that are compliant, efficient, but non-compromised in terms of customer experience. Here’s how to unify these needs and get the right balance throughout.
While organisations have become better in meeting their regulatory obligations, efforts to optimise this process typically focus on increased operational efficiency through greater automation. Less well known, but also an aid to straight-through processing, is KYC. Integrating KYC in the wider onboarding journey can reduce friction points at the start, during customer onboarding, and later on as part of business as usual.
In the age of good governance, Know Your Customer (KYC) is essential in business-to-business conduct. It helps to reduce the risk of fraud at any point in the customer journey and demonstrates positive change.
Customers prefer a frictionless onboarding process when it comes to joining an institution. The account opening and product or service purchase must be completed fast and efficiently. The onboarding process can also serve as a key trigger point for banks seeking to use straight-through-processing to manage customer lifecycles and associated best-practice.
So, organisations have an opportunity to drive both customer satisfaction and efficiency gains. Importantly, this frees compliance teams later on, allowing them to concentrate on outlying, complex KYC cases.
Fast, accurate collection of customer data is a huge asset when performing KYC on corporate entities with complex ownership structures.
With Ultimate Beneficial Owner (UBO) structures now being collated in seconds by Artificial Intelligence (A.I.) tooling, having a customer verification system that matches these efficiency savings is crucial for fast onboarding of business clients.
Whilst digital Identification and Verification (ID&V) initially predominantly served the onboarding of individual customers, its importance for corporate clients is therefore critical. The more data that compliance teams have at an early stage, the better.
What to Consider
Compile as much data early in the process, whether that is from the customer themselves (using Digital ID&V tooling) or from their business, for example with existing documentation from earlier onboardings.
Utilising additional data sources allows you to build a broader and therefore more accurate risk assessment when performing KYC.
Automating the onboarding process with increased straight-through-processing is not only quicker initially – it greatly reduces inconsistencies that would need to be addressed later.
Digital ID&V checks can be conducted consistently throughout the customer’s entire lifecycle. With an automated onboarding process, KYC obligations can be met and future screenings scheduled with little or no involvement from compliance specialists unless absolutely necessary.