In today’s globalised, fast-changing world, streamlining KYC (Know Your Customer) compliance is more important than ever for banks. These days, your customers might be anyone, anywhere in the world. Beyond being a legal requirement, verifying the identity of these new customers, ensuring they are who they claim to be and assessing whether they are a good match for your business are vital to your company’s health and good fortune.
And, of course, determining where money is coming from is also crucial in the war against money laundering and terrorism.
Every bank wants the reassurance of knowing it is complying with regulations and safeguarding its funds and future. But it’s also essential KYC compliance doesn’t take away from your main business and the relationship with customers.
So, what are the necessities for successful customer onboarding and smooth KYC and AML processes?
1. One platform for everything
The majority of KYC processes across the globe focus on three aspects: establishing a client’s identity, that they’re engaged in legitimate activities and looking at money laundering risks.
This is done through four pillars:
- Document collection
- Data assessment
- Continuous monitoring of activity
However, as both KYC compliance requirements and technology have changed, so the KYC process has evolved. Fraudsters have become more sophisticated, and regulations have become tighter, more complex and more demanding in response.
Add to that the fact every country has its own KYC and AML (anti-money-laundering) regulations, which differ widely across the globe, and KYC compliance can become a long-drawn-out and costly burden. A survey from Thomson Reuters found KYC issues had caused one in ten companies to change banks.
Disrupters are, however, revolutionising onboarding processes with KYC compliance software or RegTech. Companies such as PassFort offer everything a bank needs for customer due diligence in a single SaaS platform.
Customer due diligence processes are digitised, compliance checks are automated and risk can be monitored on a continual basis - all in one secure platform. Having a single source of truth for compliance policies, execution of processes and decision-making is extremely helpful for banks. Plus, the importance of using a streamlined onboarding and risk-monitoring process can’t be overestimated for your customers and their experience of your bank.
2. Cut through the noise
Big data brings big new challenges. It’s one thing to have a vast quantity of data and quite another to extract what you need from it.
Manual processing in KYC and AML due diligence is slow and prone to errors, while the data itself isn’t perfect: it’s scattered here and there in different systems, rarely clean and often out of date or irrelevant. That’s why automation is set to bring big changes for the better for financial institutions the world over when it comes to KYC compliance and customer onboarding.
New data tools and techniques such as enhanced search capacity and automation make verification far easier for banks and other FS firms. AI will bring a new dimension to data too, honing in on the needle in the haystack and filtering out what's irrelevant.
Already, KYC compliance software is rapidly becoming more sophisticated, with the ability to both bring together and sift through vast amounts of different and complex customer data from numerous sources in a flash.
RegTech can also find meaning and patterns in data, allowing banks to create more accurate risk profiles - ensuring they stay in compliance with complex and ever-changing regulatory frameworks.
If tools are operated under the bonnet of a single platform, they’re accessible and usable, leading to more efficient processes, more accurate information for decision-making and better collaboration different vendors.
3. Customer communication
Customer onboarding isn’t just a faceless process however: it’s also about developing a real relationship with a new and potentially valuable customer, and making the process simple and positive for them. That’s why you should choose an onboarding solution that focuses on your customers' needs as well as the regulatory requirements; one that provides support, not just software.
Recent research found that the average company has to contact a customer eight times to ensure a KYC process keeps moving. In an era when we can access our finances via an App at the push of a button, convoluted processes are a big no-no.
With the PassFort platform, our clients can request documents from their customers when needed and do so seamlessly. It is tied into the automated processes, making document collection faster and easier, solving a major pain point.
To keep up with changing regulation, to constantly improve compliance processes and to provide the most efficient and timely onboarding experience for your customers, it’s vital to take a step back and review your approach to KYC and AML.
Choosing a digital solution is the only sensible option now, so pick a single platform that provides access to quality, comprehensive and real-time data, so you can satisfy compliance checks and assess your KYC and AML performance.
Your solution should be one that maximises automation, while also enhancing the customer experience by enabling a smooth process that builds trust and long-lasting relationships based on the foundations of efficiency and good communications.
Finally, your RegTech should be flexible enough to be adapted in an ever-changing regulatory and consumer environment.
Get in touch
Find out how PassFort can solve your KYC challenges by creating more efficient digital onboarding journeys - get in touch anytime and we can arrange to discuss your compliance processes and your vision for the future.