More than half of compliance professionals say digital transformation of the customer due diligence process will have the biggest impact on their risk organisation over the next 12 months, according to a new poll from digital compliance specialist NorthRow.

The poll of compliance leaders also found that 63 percent do not measure or analyse their ‘ambers’ – clients that generate an ambiguous risk result during onboarding that requires further investigation – in their client onboarding or refresh cycles. 

With some 90 percent of compliance costs sitting in just 10 percent of these cases, close monitoring and management of ambers is critical to compliance and risk reduction efforts, but many compliance professionals are still not doing enough to tackle this issue.

The challenge of not knowing how many ‘amber’ cases you have at any one point can have a significant impact on operational efficiencies. Often manual intervention, which requires additional headcount and internal resources, is needed – creating more friction for customers.

NorthRow’s polling also revealed that 40 percent of respondents view amber management as a compliance issue and not a wider business issue. In fact, only 27 percent see it as a first line of defence issue, with 33 percent seeing it as a problem for their clients.

However, the impact of poor amber management crosses much of the business if it is allowed to continue, including knock-on effects to commercial success as well as the entire sales, provisioning and customer retention functions. Few seem to appreciate this.

A large proportion of cases identified as ambers will eventually be onboarded or retained, but the longer a business takes to onboard a client, the longer the time to revenue and the higher the risk of customer attrition. In a highly competitive market, these are inefficiencies that can make or break businesses.

Adam Holden, NorthRow CEO, said: “Managing your ambers is key to moving beyond simply knowing your customers towards truly understanding your customers. Imagine a world where you could use a tool to identify exactly where all your compliance cases sit in the process of onboarding and ongoing monitoring. Imagine a world where ever-increasing compliance costs and lengthy remediation projects are no longer required as you can manage and predict future trends. That world is not a fantasy, but a reality today. 

“Compliance teams clearly recognise the potential of technology to transform their risk organisations. By adopting the right digital solution, capable of managing, tracking and converting ambers they can bring real operational gains, improve risk processes, and ultimately create a competitive advantage for their organisations.”

If you would like to learn more about amber management and using this approach within your organisation then get in touch with the NorthRow team.