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Corporate digital identity: The future of customer centric banking

By Alex Ford | Thu 21 March, 2024
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Our recent webinar explored Corporate Digital Identity (CDI). Together with its potential to revolutionize client experience and cost models for the corporate, commercial and investment banking industry. The following blog highlights the key topics of discussion.

Panelists:

  • Alex Ford: President, North America, Encompass Corporation
  • Ivar Lammers: Global Head of Financial Crime, Wholesale Banking, ING
  • Alan McIntrye: FinTech Adviser

What is Corporate Digital Identity (CDI)
CDI enables fast, accurate identity validation and verification of corporate customers. A CDI profile incorporates real-time data and documents from authoritative public sources and private information from the customer. Subsequently providing a holistic customer risk view configured to a bank’s individual regulatory and business requirements.

Panelists agreed that CDI is emerging as a pivotal aspect of modern Know Your Customer (KYC) operations. Having the power to streamline the identification and verification of the Ultimate Beneficial Ownership (UBO) and controls of companies. Thereby improving the overall customer experience and mitigating risks.

The journey towards a holistic CDI involves bridging the gap between public information and private data. However, achieving this vision requires the navigation of the complexities inherent in different entity types and compliance standards. Every bank must configure its digital identity framework according to its specific regulatory and business requirements. This can vary from bank to bank, based on interpretations of regulation, risk appetites and market strategies.

The current landscape of CDI

Individual consumers, and the retail sector, have witnessed significant advancements in identity verification and digitization. Both of which have revolutionized customer experience and unlocked new markets.

However, the challenge of verifying associated parties within complex corporate structures in the wholesale sector is particularly daunting. With numerous entities across multiple jurisdictions, the current process is cumbersome and inefficient, creating a lengthy onboarding process for the customer. However, advancements in technology can facilitate a dynamic view of the customer and a move towards a standardized approach to identifying key stakeholders across multiple teams within the bank. Furthermore, advancing the customer experience to meet the success of that achieved in the retail sector.

A fast moving identity landscape shows there are exciting times ahead. Particularly as CDI becomes a game changer for financial institutions willing to adopt new operating models. It was felt that: failure to adapt to evolving identity standards would almost certainly result in loss of competitive advantage, reduced business opportunities, and reputational damage.

Bringing public information together with private data

Panelists discussed CDI in terms of leveraging public and private data and the intricate processes in establishing robust identity frameworks. Integrating private data into the due diligence process was recognized as being indispensable in wholesale banking. However, the challenges surrounding data privacy and the imperative for a customer-centric approach to data management were also recognized.

88% of webinar attendees said they struggled most in obtaining private data and documents when verifying a corporate client.

The contrast between the relatively straightforward identity verification methods in retail banking; with the complexities inherent in corporate environments, were also referenced. This highlighted the essential role of reliable data sources. Also noting the variations in data availability and quality across regions.

The future is where comprehensive digital identities are curated and owned by individual banks, drawing upon trusted external sources. Leveraged in tandem with privately shared information to minimize duplicative efforts.

Benefits of investing in corporate digital identity

Investing in corporate digital identity holds numerous benefits for banks in addition to operational efficiency. Panelists discussed the following additional benefits:

  • Customer experience improvement
  • Reduced customer outreach
  • Faster, more secure onboarding
  • Improved collaboration within the bank
  • Revenue generation
  • Risk mitigation

The two main KYC challenges facing corporate and investment banks are operational efficiency and customer experience according to webinar attendees.

How corporate digital identity drives transformation

Over the years, banks have built manual processes to comply with regulation. These have since been standardized and divided across teams and functions in the organization. Including offshore and onshore, makers and checkers, screening teams and due diligence teams. Elements of these activities now utilize technology, but invariably, cumbersome hand-offs between disparate systems remain.

Placing the customer identity in a digital format at the center of the operating model presents a new opportunity to simplify and streamline the many related steps in the process. Starting with an accurate, verified view of ownership structures as early as possible in the client lifecycle, will transform all that follows.

The move towards perpetual KYC (pKYC) also presents another opportunity for significant advancement, facilitated by CDI. Unlike traditional paper records, digital identities provide retrievable data points, enabling continuous monitoring and updates. Instead of conducting exhaustive reviews on all clients at set intervals, targeted reviews are triggered only by material events.

As banks navigate digital transformation, CDI will be paramount. Encompass are at the forefront of leveraging technology for customer-centric banking. Additionally, ensuring operational agility, regulatory compliance, and risk mitigation in an ever-evolving business landscape.

 

Watch our on demand webinar to learn more:

WEBINAR

Corporate digital identity: The future of customer centric banking

 

 
Author: Alex Ford

Alex drives business growth in North America, working with customers, partners and the Encompass team to transform KYC with automation in financial institutions and other regulated entities. Joining in 2012, Alex has held Executive responsibility for business functions including Customer Success, Operations, Marketing, Product and Delivery. From 2015 to 2020 Alex was based in Glasgow with the launch and expansion of the UK operation, before taking up leadership of the North America business.

LinkedIn Profile | Alex Ford

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