87% of corporate treasurers have abandoned banking applications due to lengthy onboarding Read here

The transition from manual KYC to process automation

By Howard Wimpory | Fri 23 June, 2023
The transition from manual KYC to process automation | Encompass blog

Many global banks and financial institutions have well established large operations and compliance departments. Others may outsource elements to ensure they receive the level of expertise required without the financial burden of a full-time resource. Whichever approach is used they are often cumbersome and inefficient and can consist of thousands of full-time employees.

Technology to advance KYC

These teams are engaged in deeply entrenched, repetitive manual customer due-diligence and onboarding tasks. Back-office teams are under increasing pressure to be more efficient and improve the bottom line. So now is the time to make the transition from manual Know Your Customer (KYC) to dynamic process automation.

Adopting technology can assist with improving margin and team efficiencies. As an example, by increasing the volume of straight through processing (STP) for low and medium risk cases this allows analysts to focus on more complex, investigative tasks. With a knock-on effect to faster onboarding and increased productivity, the position of the bank is improved in terms of income generation, client experience, reduced operational costs and adherence to policy.

Inefficient KYC onboarding and refresh is costing millions

With up to 150 days before receiving revenue and an annual average compliance spend of US$60m banks must look for KYC efficiencies.

Lengthy onboarding, or refresh, from multiple occasions of customer outreach, results in internal friction and increased abandonment rates in some areas. Complex KYC reviews require time consuming research and collation of documents and data with legacy processes. Often across multiple systems when unraveling complex corporate structures to identify Ultimate Beneficial Owners (UBOs). Banks accumulate extensive information about their customers but making sense of that data, and having it ‘tell a story,’ is another matter.

Data is key to all of this – the fuel which drives the process. Automating processes, by pulling customer information automatically from trusted sources – whether internal or external – can reduce the amount of ‘rubbish’ entering, or remaining in, your systems. Adopting automation in this way increases the effectiveness of, or reliance on, your operations teams. With banks having KYC teams of hundreds of employees, the impact on cost is also substantial.

Trusted data sources

Accurate customer data – whether drawn from internal sources or external databases – is essential to ensure that automated systems are effective. Using data from anything less than trusted and reliable resources, reduces the effectiveness and efficacy of automated processes dramatically.

Banks are under the spotlight to prove ROI and client experience on their processes, so freeing up employees to work on more complex cases adds considerable value. Increasingly, scalability and being able to do more with less are becoming prized assets. KYC process automation can drive faster onboarding and client refresh but reduced operational costs.

Cost is not always the main driver for automation. There are other considerations which can include;

  • the ability to get to the data points more easily and effectively
  • recognizing the additional value of improved customer experience
  • reduced risk exposure
  • fewer human errors
  • ability to manage workloads more effectively

In addition, KYC process automation allows a bank to be more competitive. A superior customer service can be offered with faster time for onboarding and refresh. Post pandemic experience has seen customer demand for a more immediate and digital experience rise exponentially.

What is KYC process automation?

It is essential for banks to carry out KYC processes to adhere to regulatory and compliance requirements. By replacing legacy manual processes with automation financial institutions can draw multiple datapoints into one single golden source for easier visualization and analysis in real-time. Additionally, the automation ensures error free processing and scale which manual outstrip the limitations of manual processes.

Banks have patchworks of legacy systems and manual processes for the delivery of KYC. However, with increased focus on operational effectiveness and availability of technology, the transition to process automation delivers a route to streamline the KYC process to drive efficiencies and enhance customer experience.

KYC process automation is the use of technology to automate repetitive and replicable KYC business processes and functions. It brings together information from a range of sources to produce a truly agile and digital outcome in real time. It is a simpler and faster way to enhance business competency and agility, increasing ROI.

Banks can use the advanced technology of process automation to digitize existing KYC search procedures. Sourcing, retrieving, and storing the data required for KYC within a digital customer profile record, banks can radically reduce the time and expense of onboarding and ongoing compliance.  In turn leading to increased effectiveness to deliver better KYC outcomes.

Reducing manual tasks to achieve operational efficiencies

Process automation can be integrated into existing business systems. Including customer relationship management (CRM) and client lifecycle management (CLM) solutions. This allows the bank to maintain one view of the client across the organization in real-time. The technology can navigate, read data, match, and merge datapoints and documents, and perform a wide range of rule-based tasks. Consistency across the function and improved customer experience with reduced client outreach are additional benefits.


Download our ebook to understand the benefits of KYC process automation:

  • Increased operational efficiency and productivity
  • Reduction of ‘swivel chair’ syndrome
  • Visualization of UBO structures
  • Simplified KYC management
  • Digital KYC profiles
  • Reduction in incidence of human error
  • Faster onboarding and time to revenue
  • Complete audit trail
  • Scalable processes

Drivers to automate KYC

Today, automation of KYC processes can:

  • Provide connection to limitless global public and premium data products in real-time
  • Give access to golden source information and documentation from preferred data providers
  • Facilitate parallel searching and entity resolution
  • Enable corporate structure unwrapping and UBO identification
  • Deliver complete digital KYC profiles
  • Provide a full audit trail for every customer’s KYC lifecycle
  • Audit log documentation and leave a visible data trail
  • Provide a precursor for pKYC

All of which can help to better position financial services firms for an economic recovery and ensure they are set up for long-term growth through resilient processes.

KYC process automation can not only improve your business, but also protect its continuity and scalability.


The benefits of KYC process automation

Why it is time to overhaul manual processes

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

You also might be interested in


Discover corporate digital identity from Encompass


Find out more