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Navigating the complexities of KYC build vs. buy

By Howard Wimpory | Wed 22 May, 2024
Build vs. buy

For corporate banks, the choice between building an in-house KYC solution or purchasing a pre-built one is often laden with complexities. In our eBook, we navigate the path through the decision-making maze of KYC build vs. buy. Offering invaluable insights and a framework to empower banks to make an informed choice.

The complexity of client onboarding and maintenance

Corporate client onboarding presents a myriad of challenges, intensifying the build vs. buy dilemma. While developing an in-house solution may appear enticing, it demands substantial resources and expertise, often leading to underestimated project scopes and collaboration hurdles. Conversely, opting for a pre-built solution promises expedited deployment, comprehensive support, and scalability.

Success is built on technology

Technology plays a significant role in banking success, emphasizing the need for a strategic approach to KYC. Despite internal development attempts, banks grapple with regulatory demands, talent retention, legacy technology constraints, and budget sustainability. However, external vendors bring proven methodologies and best practices to the table, offering time and resource savings while delivering operational value.

Additionally, integration of either built or bought tools with existing infrastructure is crucial. Pre-built solutions are often designed for seamless integration, minimizing disruptions, and ensuring compatibility with current systems, whereas in-house solutions might face challenges in achieving the same level of integration efficiency.

Challenges of building an in-house KYC solution

From initial planning and scoping, to dealing with the data deluge and accessing data sources, banks must navigate complex workflows. Data orchestration, automation, collation, data mapping and maintenance further compound the challenge. These considerations highlight the intricate landscape banks face in developing their own KYC solutions.

Risk and cost considerations

The hidden costs and integration complexities of building an in-house KYC solution necessitate meticulous cost-benefit analyses. Ongoing maintenance, time-to-value considerations, and operational efficiency emphasize the importance of evaluating long-term commitments and scalability, avoiding short-term cost-centric perspectives.

Reasons to buy a KYC solution

The advantages of purchasing a pre-built KYC solution come to the fore when considering a vendor’s expertise and the scalability of the solution. Vendors specialize in addressing these complex challenges, offering ready-to-deploy solutions that streamline integration, enhance operational efficiency, and yield substantial cost savings in the long run.

One significant point to consider is the long-term maintenance cost. Banks that choose to build their own KYC solutions often face “builder’s regret” as they grapple with the ongoing expenses and complexities of maintaining and updating the behemoth they have created. In contrast, vendors distribute these maintenance costs across multiple buyers, resulting in a more manageable and predictable expense for each individual bank. This shared cost model allows banks to benefit from continuous improvements and updates without bearing the full financial burden, further enhancing the appeal of purchasing a pre-built KYC solution.

Innovation from Encompass for corporate banks

With a decade-long journey of innovation, Encompass has not only developed an innovative solution, but has continuously refined and enhanced it, surpassing industry standards and expectations.

Our comprehensive suite of advanced features addresses corporate banks’ specific KYC challenges. Intelligent process automation, data normalization and entity resolution capabilities enable swift and accurate identification and verification of corporate entities.

Explore our decision-making framework

Leverage our decision-making framework to navigate the complexities of the ‘build vs. buy’ dilemma and drive success in your KYC automation journey. Read our eBook to gain deeper insights.

 

WHITEPAPER

Automating KYC

The build vs. buy technology dilemma

 
Author: Howard Wimpory

Howard works with Tier 1 banks to digitally transform their KYC onboarding and refresh processes. He has held a number of executive-level operational roles with a major global bank including leading their wholesale KYC Onboarding and Refresh functions. His most recent role prior to Encompass was as Managing Director, Group Financial Crime Operations position at Barclays Bank, where amongst other functions, he was accountable for leading KYC Remediation of Corporate and Investment Bank Client records to FCA committed timeline.

LinkedIn Profile | Howard Wimpory

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