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Four signs your bank is ready for dynamic KYC process automation

By Clare Puplett | Wed 5 July, 2023
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The complex nature of KYC onboarding puts increased pressure on corporate banks.

Manual KYC processes, together with in-house builds and legacy infrastructure, create bottlenecks and blockers for scalable growth. We have identified four signs that your bank is ready for dynamic KYC process automation to solve these challenges:

1. Poor customer experience is impacting sales

With corporate onboarding times of up to 100 days, it is not surprising that backlogs occur within a manual KYC process. For clients providing the same information on multiple occasions, friction creeps in and threatens the customer experience.

Without process automation, banks are missing the opportunity of 100% straight through processing (STP). Automation can increase productivity by up to five times, remove bottlenecks and have a positive impact on customer experience. It can also reduce time to trade by over 40% as customers come on stream sooner. Additionally, providing more immediate opportunities for cross and up sell.

Signs for change

  • Customer complaints at lengthy onboarding
  • Poor service levels evidenced in NPS and CSAT scores
  • Abandonment rates are increasing
  • Poor time to revenue

2. Incomplete data for corporate unwrapping and UBO verification

Having to access multiple data sources and manually matching and merging information takes time. Often multiple systems are used to unraveling complex corporate structures to identify ultimate beneficial owners (UBOs).

Inconsistent approaches to collecting data prevents analysts from building a complete customer profile, from onboarding through to refresh. Furthermore, banks are at risk of not finding every level of the corporate hierarchy without access to a wide range of real-time data that covers multiple jurisdictions.

Introducing dynamic KYC process automation provides a holistic view of the client from streamlined real-time data collection. Additionally, banks can achieve 60% reduction in screening, ownership and unwrapping times with client outreach decreasing from five, down to just two occasions in some instances.

Connecting to numerous data products, with multiple searches being performed in parallel, from one single platform enables analysts to make informed decisions and focus on deeper analysis. With integrations into customer relationship management (CRM) and client lifecycle management (CLM) systems, banks can deliver a single view of their customers.

Signs for change

  • Poor access to real-time data
  • Lack of match and merge functionality
  • Inconsistent processes
  • Increased exposure to risk

3. KYC demand exceeds budget and resources

Banks typically employ 10 percent of their workforce in financial crime related activities, with KYC often being the costliest activity. However, there is a skills shortage when recruiting specialist staff, so often, analyst vacancies are left unfilled. This leads to backlogs, human error, and an inconsistent approach to KYC.

By streamlining and automating the most time-consuming search, data collation and analysis part of KYC, teams can reallocate resources from data processing to higher value tasks. Customer checks can be completed in as little as two minutes with access to millions of entity data points managed from one system.

Building the view of the customer right first time dramatically improves ROI. With the opportunity to achieve 10x uplift in completeness, and up to 95% time savings, banks can transform their KYC process.

Signs for change

  • Volumes are growing, but resources are flat
  • Lack of skilled KYC analysts impacting capacity challenges
  • Analyst productivity is low
  • Excessive time spent on QA/QC and rework generated by human error

4. Non-standardized processes

Manual KYC processes are disjointed and often result in unnecessary client outreach. Miscommunication also occurs between teams without a single source of truth. Additionally, there is an increase in the potential risk exposure with poor or incomplete audit trails.

Not only does this limit efficiency and efficacy, but it also prevents any continuous improvement in performance. A lack of a single process on which to iterate hampers the bank from competing for new business and achieving growth at scale.

With an automated KYC solution, policies and procedures are executed the same way every time, all tracked and traceable through a digital KYC profile that updates in real-time.

Encompass collaborates with CRM and CLM providers to ensure a consistent approach to KYC and ongoing refresh and monitoring. With simplification of the technology landscape a single point of entry can be used to deliver live searches to build a single consistent digital KYC profile.

Replicable and reliable KYC search ensures globally consistent adherence to bank policy. Moreover, a dynamic digital audit trail alleviates risk and enables demonstrable compliance and futureproofs against regulatory change.

Signs for change

  • Inconsistent approach to KYC processes
  • Poor audit trail and exposure to regulatory risk
  • Lack of traceability and accountability

Is your bank ready for dynamic KYC process automation?

In recognizing the above signs, your bank is definitely ready for automation. Encompass supports banks in identifying the need to modernize, similarly, knowing where to invest and which initiatives to prioritize, instead of continuing with inefficient manual processes. If you would like to learn more, please get in touch.

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