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OK YC EQ Receivables Finance

OK-YC: Moving Europe’s KYC From Adequate, To Great

23 July 2021

In the early days of the pandemic, receivables finance lenders were concerned that business distress would increase borrower fraud levels.

The swift rollout of government stimulus packages in the early days of the pandemic, quelled these fears. Now, as the economy unlocks, and the government withdraws its support, the question is whether there will be an increased risk for lenders to bear.

MICHAEL Michael Ellis Managing Director, EQ Riskfactor

In a recent EQ Riskfactor survey of four European countries - the UK, the Netherlands, Germany and France - most receivables finance lenders were only ‘somewhat’ satisfied that their risk management and ‘Know Your Customer’ (KYC) processes met compliance standards.

Whilst this is concerning, now is the time for lenders to adopt risk management technologies. These will help them to properly assess the customers they onboard, without restricting their onboarding capacity.

By automating their risk management processes, first-mover lenders can seize opportunities faster than their competitors. They can enhance their decision-making and customer onboarding processes, then build a comprehensive risk profile through the customer lifecycle.


Through daily portfolio monitoring, you can investigate any outlying events, monitor the individual circumstances of your customers and the overall health of your lending portfolio. Automated collateral and financial risk scores drive a more targeted and best-practice risk management, due diligence and verifications approach.

— Michael Ellis, Managing Director, EQ Riskfactor

Knowing Your Customer

KYC is now front and centre of due diligence at the onboarding stage. As KYC typically starts when onboarding a new client, lenders can improve the customer experience by using digital tools, rather than paper documents or certifications. They can capture client information faster, at reduced cost and without duplication.


By aligning the digital information with their customer relationship management (CRM) system, lenders have a single source of truth and can monitor the entire client lifecycle as credit scores change.

— Michael Ellis, Managing Director, EQ Riskfactor

Receivables finance lenders are also using KYC to share information across different departments and locations. In turn, they eliminate duplication, increase efficiency and free up time for business development.

Technology And The Human Touch

As with all technologies, key to its success is buy-in – ensuring teams understand the technology and the value it can bring.

It is too soon to predict the business impact once government support is withdrawn. It is likely to be gradual. But media coverage around the dramatically high levels of fraud being reported is concerning. People are taking advantage of the high volumes of support being provided by lenders and government. As lenders hold the primary customer relationships, they are accountable for the appropriate levels of due diligence and KYC checks. The only way to handle the high volumes and the urgency of turnaround is to use technology effectively.

At the same time, technology by itself is never the total solution. Its purpose is to provide the analysis for underwriters and knowledge experts to make informed decisions. As with all technologies, key to its success is buy-in – ensuring teams understand the technology and the value it can bring. Moving forward, the leading receivables finance lenders will be those that continually train their teams to ensure best practice, drive continual improvement and grow their knowledge base.

More about the report

Volume 2 of the EQ Riskfactor Receivables Finance Global Outlook report, Technology – The Route To Resilience is out now.

It provides fascinating insights around sustaining future growth in the post-COVID recovery. Each volume of the report will explore different aspects of the study, revisiting views, opinions and analysis.

Read the full report here

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