Understanding the present state of pKYC

Perpetual KYC (pKYC) adoption has been seen as a game-changer in how banks deliver Know Your Customer (KYC).

To understand where the industry now stands, we spoke with transformation expert Howard Wimpory about the latest trends and adoption.

What is pKYC?

Unlike traditional scheduled periodic reviews, pKYC enables near real-time updates whenever a change to a client’s profile is detected. This continuous model keeps customer information and risk categorisation current while reducing unnecessary manual reviews.

Is interest still growing in pKYC?

Yes, though the focus has shifted. Tier 1 banks still view pKYC as a long-term target operating model. But many are stabilising periodic reviews while taking incremental steps toward adoption.

Interest is driven by regulatory expectations for risk-based models, operational pressures to improve efficiency, and the need to enhance client experience.

How can Tier1 banks start their pKYC transformation?

Implementing pKYC can take up to three years and requires sustained commitment. The most effective approach is a phased strategy, treating the transition as a series of incremental steps. By managing stages carefully and recognising milestones, banks deliver tangible benefits while keeping stakeholders engaged.

Working with trusted RegTech partners, such as Encompass, can accelerate progress, providing expertise and structured guidance while helping banks maintain control over milestones.

How does corporate digital identity affect pKYC adoption?

Digitising clients’ KYC profiles is an important area of focus in the pKYC journey. Corporate digital identity (CDI) integrates data from multiple sources, giving a complete view of a company’s identity. This enhances monitoring, reduces repetitive data submissions, and streamlines compliance, improving efficiency for both banks and clients. CDI is becoming central to scaling pKYC and maintaining regulatory confidence.

What are the challenges?

From my experience with banks on transformation, several challenges continue to shape pKYC adoption.

Data costs remain a concern to be assessed; scaling real-time monitoring is expensive, and many institutions are still balancing this against other priorities. Materiality assessment is another area of focus: banks need further testing and evaluation on what constitutes a meaningful change, particularly as the industry shifts from capturing documents to ingesting digital data points.

While the industry is moving toward data-driven compliance, regulators remain document-focused. The regulators need to be taken on the pKYC journey. AI presents significant opportunity, and I’ve observed growing experimentation with AI , though concerns around storage and control remain. Finally, client outreach continues to consume a large portion of KYC effort, with up to 60% of average handling time spent waiting for responses.

What are the opportunities for pKYC?

Several trends are giving me confidence that pKYC adoption is becoming achievable. AI is maturing, banks are embedding it into operations for real-time anomaly detection and adaptive monitoring. Data integration at scale is improving, enabling a seamless flow of information needed for continuous monitoring.

Customer-first strategies are starting to reduce unnecessary outreach and strengthen relationships. Rising costs in the current model are also becoming a lightning rod for change, forcing banks to explore smarter, more efficient approaches. At the same time, collaborative ecosystems, through partnerships with RegTech firms,are helping banks share learnings and accelerate adoption.

The state of pKYC adoption: 2025 and beyond

2023 highlighted pKYC as the desired target operating model (TOM, however, cost pressures held back major investment. As a result, progress was limited, with many institutions focusing on stabilising and optimising periodic reviews.
By 2024, momentum began to build, laying the groundwork for more ambitious steps.

Now in 2025, some banks remain at the earliest design stages, while others are moving from periodic refresh cycles to more event-driven, data-led models. Multiple event triggers are being piloted, from changes in product utilisation, such as currencies traded or trade values, to new payment destinations. Some institutions are also assessing the cumulative impact of these triggers on overall client risk.

While adoption is uneven, the transition promises faster risk detection, efficiency , reduced client friction, and stronger regulatory alignment. Early pilots show progress, but industry-wide uptake remains at a formative stage.

Looking ahead to 2026, we expect adoption to move beyond pilots into structured rollouts. Banks will increasingly measure success not only by compliance outcomes but also by the efficiency gains and customer experience improvements pKYC delivers. With regulators showing greater openness to innovative monitoring models, the next 18 months could mark the tipping point where pKYC shifts from long-term aspiration to operational reality.

Further reading: Planning your journey to pKYC