• Steve Hadaway, Chief Revenue Officer at Encompass Corporation


• 05.06.2023 12:30 pm
#KYC

In recent months, there has been a push for digital transformation initiatives to accelerate across the financial services industry. This has come as customer expectations have evolved, and as businesses demand a faster, smoother and more impactful journey than ever.

To deliver, banks must now maximise business efficiency to supercharge growth, and all while remaining vigilant and compliant with an ever-moving regulatory framework as the threat of financial crime remains. In fact, recent research from UK Finance highlights that the UK financial services sector spends £22,000 per hour fighting fraud and financial crime.

While this acts as a reminder of the threat, it also emphasises the high cost involved for banks, providing an example of why technology-driven processes and solutions, such as dynamic KYC process automation, should be utilised to ensure continued compliance while driving the desired level of efficiency.

When looking at Know Your Customer (KYC) processes, although innovation is a focus for many, we still see banks relying on outdated manual processes, which do not yield the results required. Lengthy onboarding processes and repeated outreach, often for information that has already been supplied, are just two of the pain points that result in frustrations for customers and can, in the long run, lead to lost business.

For financial institutions to remain competitive, they must now look to automation to bring optimum output across operations and customer experience, which is imperative to securing revenue in the current landscape. 

Automation is the future 

Unquestionably, for institutions looking to get the most out of KYC processes, spending on technology can have a significant impact, which must now be realised.

While the UK’s economic forecast has improved, as the nation avoided a technical recession, spend is still widely questioned, so understanding and focusing on areas that will have a tangible effect on day-to-day operations is more important than ever.

When it comes to KYC automation, the value is multi-faceted, with compliance being only one beneficiary. KYC is an essential process, allowing institutions to verify the identity of clients and flag potential risks, and one benefit found through automation is connected to operational time savings. It has been found that, with Encompass’ dynamic KYC process automation, each analyst can save up to 13 hours per KYC investigation, accelerating overall output and profit.

Operationally, automation can also allow financial institutions to put their experts’ skill to the best use, with analysts being freed up to concentrate on cases that really require human intervention, bettering overall productivity, as well as their job satisfaction.

These days, there is a vast number of technology solutions available, and ensuring the right fit to business objectives is key. While digital transformation journeys are not an overnight exercise, they provide both incremental and long-term gains that cannot be ignored, with automation no longer seen as a ‘nice to have’.

The importance of compliance

As mentioned, to keep up with the moving regulatory landscape and obligations when it comes to Anti-Money Laundering (AML), banks not only need to spend money, but also time and resource.

While non-compliance can prove costly, both in terms of fines and reputational damage, institutions also have a duty to protect their customers and their data, with outdated, manual processes no longer proving as effective as they could be.

Implementing processes that utilise KYC automation dramatically improves results overall, ensuring maximum effectiveness and efficiency. With the creation of digital KYC profiles enabled through automation, speed is also assured, as KYC bottlenecks are removed. Much of the strain is also taken away from analysts, and time to trade reduced by over 40 per cent.

Improved customer journey

Today, it is no secret that a crucial ingredient to business success is customer satisfaction.

In the case of the KYC process, traditional manual approaches, at onboarding and also during periodic refresh, require extensive documentation and verification, often resulting in a lengthy, fragmented cycle and frustrated customer base. As well as this, staff members who manage these processes are often overwhelmed with constant checks necessary, which can lead to decreased productivity and staff engagement.

That is why, if businesses want to keep pace and set the ground for growth, it is time to trust in automation, focused on real-time investigations. Automating the manual due diligence process undertaken by KYC analysts can reduce the onboarding period from 12 to two days, giving customers a quicker, more seamless and much-improved experience.

As well as this, having real-time access to the data required for investigations also reduces the need for outreach, meaning not only can onboarding be improved but the journey as an existing customer is also made less cumbersome, improving retention.

For banks to thrive, it is imperative that they invest in the best in technology to boost processes, customer loyalty and, in the end, the bottom line. This should no longer be seen as simply an opportunity, but instead a necessary step in achieving real success, with the widespread benefits of automation being felt throughout the organisation – one of which being a faster path to revenue and growth.