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 that it is complying with regulations and safeguarding its funds and future. But it’s also essential that 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 that 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 that KYC issues had caused one in ten companies to change banks.
Disrupters are, however, revolutionising onboarding processes with KYC compliance software. Companies such as PassFort offer everything a bank needs in a single platform. Customer due diligence is digitised, compliance is automated and risk can be monitored - all in one place. The importance of using a streamlined process can’t be overestimated for you or your customers.
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/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errors, while the data itself isn’t perfect: it’s scattered here and there in different systems, rarely clean and often out of date or irrelevant.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 data from different sources in a flash.
It 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 these tools are operated under the bonnet of a single platform, they’re accessible and usable, leading to more efficient processes and better collaboration.
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 for them. That’s why you should choose an onboarding company that focuses on your customers' needs too - 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 things moving, to constantly improve and to provide the most efficient and timely onboarding experience for your customers, it’s vital to take a step back and continually review your KYC and AML processes.
This means picking a system that provides quality real-time data, so you can analyse and assess performance, and one that maximises automation, but is also flexible enough, so it can be adapted in an ever-changing environment.
Get in touch
Find out more about how PassFort can revolutionise your customer onboarding journeys. Email us today and we can arrange a time to discuss your existing processes and your vision for the future.