A year to forget or one to remember?
It’s been a tough year, there is no denying it. Many people and industries have suffered beyond measure. We have missed, and in some cases lost, our loved ones. Everyone has faced extreme uncertainty, whether that has meant working harder than ever before or feeling desperate that we will have no work at all.
But it is also fair to say that it hasn't been all bad. Neighbours helped each other, vaccines were developed, kids went back to school, and the spirit of entrepreneurialism took hold.
Flourishing financial services
Some sectors and products flourished in 2020 because of the conditions created by COVID-19 - financial services being one of them. Customers were sent flooding online to make digital applications for products or to change the way they carried out banking, investment and payments online.
The path to digital transformation of KYC due diligence was accelerated due to the pandemic and many firms who had thoughtful and careful plans to transform over time had to put those plans into overdrive to meet demand, adapting at breakneck speed. This meant that in the midst of a near-global lockdown transactions could continue, compliance checks were made and new customers onboarded.
According to finder.com's report on the state of digital banking in 2020, nearly a quarter of British adults have now opened an account with digital-only banking, this is around 12 million people. And they also say that two-thirds of banking customers plan to convert to a fully digital banking service in the future.
The market opportunity therefore remains huge for financial services businesses equipped with a digital offering and the ability to digitally onboard new customers compliantly and with great experiences.
Digital KYC with PassFort
PassFort has carried out circa 12,700 calls for new customer data each day of the year so far. This means that by the end of 2020, we will have made more than 5 million data requests as part of fully digital customer onboarding journeys. Checks have included automated KYC, AML, PEPs and Sanctions, device-fraud detection and the list goes on.
More than 1.6 million customer onboarding journeys were initiated in PassFort this year. Our clients have been able to result, on average, 91% of those journeys using Straight Through Processing (STP) - that's left only 9% of applications to go through a process of enhanced due diligence.
The benefit of this kind of STP rate is that valuable compliance analysts can focus their time and attention where it is needed most - on medium and high-risk customers - and new applicants can get converted quicker, making for better experiences.
Compliance teams haven't been able to collaborate in offices in the same way, clearly, so having an online platform to decide cases, to gather further documentation from new customers, and to escalate cases within the team has proved of real value to our fab customers.
One of our clients, Yamini Sogar of BitPay, was kind enough to provide a testimonial earlier this quarter, saying: "I am very impressed with PassFort, it helps BitPay set a great compliance standard for the crypto industry. PassFort has scaled to support our demand with their great platform and a world-class team! We are now able to provide our customers a great onboarding experience that is robust, automated and seamless."
Fighting side-effects of 2020
It is also fair to say that 2020 and the market conditions it created did have another nastier side-effect for financial services firms. That's the worrying uptick in financial crime driven by the pandemic. It was a sad inevitability perhaps as more people came under financial pressure or organised criminals found new ways to exploit systems.
One of our lovely partners, TransUnion, has been closely tracking changes in risky behaviour and increases in fraudulent activity since the pandemic took hold.
TransUnion reported that there was "a 23% increase in eCommerce transactions" since mid-March 2020, and there has been an "11% increase in Financial Services risky transactions." Also "34% of Millennials report they have been targeted by digital fraud related to COVID-19".
Facts like these reported by TransUnion and more widely in the press make it even more important to ensure financial services businesses and regulated firms Know Their Customers.
Ensuring fraudsters are prevented from gaining access to products. Ensuring the proceeds of financial crime can't be transferred. Ensuring money laundering is spotted and reported. These things are for sure the responsibility of financial services business, but they are also just the right thing for us all to do.
Facing 2021 with a digital head on
Farewell 2020, you maniac - you have been a lot.
Looking forward to next year with hope and positivity, we would love to know what your plans are for 2021 in terms of digital KYC. What are you prioritising? What do you want or need to achieve?
The PassFort team would love to stay in touch with you. We could help digitally transform your customer onboarding journeys; automating the compliance checks you need to make to get customers converted swiftly and safely, and keeping the fraudsters at bay.
When you are preparing and planning for 2021, bear us in mind and please get in touch - we would love to hear from you!