Why KYC automation is key to business growth strategies

Throughout financial services, we are seeing an increased push for digital transformation, as customer expectations rise and banks look to maximise business efficiencies to supercharge growth and, ultimately, boost the bottom line. 

Alongside this, when it comes to regulatory compliance, the UK Government has recently introduced the Economic Crime Plan 2, and other measures, to combat the pressing issue of financial crime, which is an ever-present reminder of the need to balance this pursuit of growth with meeting compliance obligations.

Traditionally, in the case of Know Your Customer (KYC) activities, and particularly onboarding, banks and financial institutions have relied on predominantly manual systems and have not made full use of innovative solutions, such as dynamic KYC process automation, which can ensure continued compliance while driving efficiency across the board. 

To deliver on customer and regulatory expectations, as well as remain competitive in a crowded market, they must now trust in the technology available to them. Not only can outcomes be significantly improved now by doing so, but future benefits will also be realised as the KYC operation will be set up to handle ongoing business growth.

Finding the impact

For institutions in the process of transforming their KYC processes, spending on technology that can have unquestionable impact is vital. 

While the UK has avoided a predicted technical recession so far, businesses must still be mindful when allocating budgets, which makes it even more important to concentrate on those areas that will have a tangible effect on day-to-day operations.

We know that, in the world of financial services, it is vital to stay ahead of the game when it comes to compliance. KYC is an essential component, allowing institutions to verify the identity of clients and flag potential risks, and one headline benefit found through automation is around time savings. It has been found that, with Encompass’ dynamic KYC process automation, for example, each analyst can save up to 13 hours per KYC investigation, boosting overall output and, ultimately, profitability.

Impactful customer experience

Not only can automation result in a positive return in investment through efficiencies and improved processes, leading to overall growth, but, as mentioned, it also enhances customer experience, particularly at the onboarding stage.

Traditional processes require extensive documentation and verification, often resulting in lengthy onboarding times and missed revenue opportunities. As well as this, staff members who manage these processes are often overwhelmed with constant checks and the ever-changing regulatory landscape, which can lead to decreased productivity.

The way in which businesses can keep pace and promote growth is by utilising 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 faster, much-improved experience overall.

Another game changer connected to technology is that, with automation, digital KYC profiles can be built in minutes, rather than days or weeks. This removes KYC bottlenecks, takes much of the strain away from analysts, and reduces the time to trade by over 40 per cent, making for a more rounded, smoother service that increases staff morale, as well as brings satisfaction externally, resulting in increased loyalty.

Streamlined systems

KYC compliance is a continuous process, with the regulatory landscape quickly evolving.

Compliance teams must stay up to date with the latest regulations and policies to ensure that their organisations are meeting obligations. Enabling consistent, streamlined compliance, automation provides real-time access to the critical data required for investigations, while also assisting in monitoring regulatory changes and updating customer profiles in real-time. This allows for a more robust, effective procedure, which fully automates the KYC search in eight minutes.

For banks and financial institutions to thrive today, it is imperative that they leverage the best in technology. With automation, organisations can see a positive impact on all facets – from processes to satisfaction and returns – that will help to power meaningful long-term business growth.

About the author

David Williams has more than two decades in financial services – working with banks and technology solution providers, solving challenges and managing risks across onboarding, data, and KYC. An experienced manager with a track record of bringing transformational change across banks, David is currently Global Head of Presales at KYC automation provider Encompass Corporation.