Global financial services firms have many priorities and have to negotiate a range of challenges as they strive to provide the best service in today’s fast-paced environment.

When taking a deeper look at these challenges, no area is more pertinent than Know Your Customer (KYC) and customer due diligence.

An increase in regulation is adding a degree of complexity to customer due diligence requirements and it has become clear that teams are struggling to manage ever-changing rules while keeping up with various responsibilities.

In an effort to bring real change to KYC processes that make an impact to those in the industry, Encompass conducted a survey questioning onboarding and compliance professionals about the challenges they come up against in their day-to-day roles.

While more than half of all respondents operate within compliance, others who work across the associated industries, in areas such as business development and front office, also provided insight into their jobs, the customer groups that they target and the way in which they approach onboarding new clients.

the results

Delving into subjects including the level of ease with which current processes allow KYC to be performed when onboarding, the most common challenges professionals come up against when performing KYC and their use of automation to overcome these, the survey bracketed customer types into large corporates, mid-market, SME and individuals/sole traders.

Those who responded shared that mid-market proves most difficult to navigate in terms of KYC tasks and onboarding, with 48 per cent rating the process for these customers as challenging. In contrast, when questioned on dealing with sole traders/individuals, only 29 per cent found this aspect to be challenging.

The research gives an overview of needs and issues to be tackled in order for these processes to be more effectively carried out, with the increased reliance on automation evident, as many are found to be currently utilizing it in their onboarding processes, or considering doing so in the future.

what challenges do you face when performing KYC?

Key findings include:

• the top three challenges when performing KYC are; customer outreach [80 per cent], identifying beneficial ownership [59 per cent] and unwrapping corporate structures [57 per cent]
• almost a third of respondents are using 3+ registries [28 per cent] and sources of business information [30 per cent] to onboard a customer
• 81 per cent of respondents say they face some or significant challenges in ensuring consistency in data gathering across their business
• more than half are Implementing customer onboarding technology in an effort to deal with the challenges they find, while 52 per cent are already automating manual processes with a considerable proportion planning to do so in the next 12 months