Guest comment by Steve Hadaway
Today’s customers have set a high bar, expecting a faster, smoother and more impactful end-to-end experience than ever. As a result, the potential rewards for meeting these expectations act as huge incentives for banks and financial institutions yet to embrace digital transformation.
Organisations are striving to offer a seamless customer experience while remaining compliant with an ever-changing regulatory framework. A key consideration here is the Know Your Customer (KYC) process, both during onboarding and as part of periodic customer refreshes.
Although a mandatory process that allows institutions to verify clients’ identities and flag potential risks, the manual processes traditionally relied upon are time-consuming and labour-intensive for customers and employees, and expensive for banks.
In fact, as underlined by research, KYC due diligence acts as a significant bottleneck, which can negatively impact the bottom line by leading to customer abandonment. Conversely, innovating with dynamic KYC process automation, for example, can be a game-changer.
With the industry facing a skills shortage, banks are struggling to find the expertise needed to effectively carry out KYC tasks
With automation, digital KYC profiles can be built in minutes. This removes stumbling blocks, takes strain away from analysts and reduces time to trade by more than 40 per cent. Ultimately, this leads to a more efficient, smoother onboarding experience that increases staff morale and customer satisfaction, resulting in increased loyalty.
It is for these – and many more – reasons that banks should look to automation technology to supercharge growth.
Typically, banks dedicate 10 per cent of their workforce to financial crime-related activities, with KYC often cited as the most expensive requirement. While ever critical that banks don’t fall foul of the reputational damage and costs associated with non-compliance, doing so while maximising efficiency requires a technology-first focus.
With the industry facing a skills shortage, banks are struggling to find the expertise needed to effectively carry out KYC tasks. Analyst positions are going unfilled, creating backlogs, increasing pressure and resulting in cumbersome customer journeys.
A manual onboarding process can result in lengthy, fragmented cycles. As such, customers can be left feeling frustrated
Technology can assist in managing workloads, allowing analyst time to be spent on the most critical tasks. Not only does this enhance productivity, but it also boosts job satisfaction and overall business efficiency.
To remain competitive in what is undoubtedly a complex landscape, managing customer relationships effectively is crucial. It is a common theme that customers are coming into the market looking for more than ever, and organisations must deliver.
Clearly KYC is not an optional activity, allowing banks to gain insights into every individual or organisation that they do business with. However, as we know, traditional manual processes are no longer sufficient, and can harm the customer relationships that underpin success.
Often requiring extensive documentation and verification, a manual onboarding process can result in lengthy, fragmented cycles. As such, customers can be left feeling frustrated, and it is not uncommon for them to seek alternative options, resulting in lost revenue opportunities.
In stark contrast, automating the due diligence process can decrease the onboarding period from 12 days to just two, giving customers the faster and easier experiences they expect. Meanwhile, having real-time access to the data required for investigations also reduces the need for customer outreach, resulting in enhanced engagement and retention.
Over time, this can directly impact on growth and revenue. With KYC process automation improving the customer journey from beginning to end, reputation is enhanced, and new business opportunities are unlocked.
To safely operate, while putting the building blocks in place to scale and grow, automation technology can no longer be just a nice-to-have
The financial landscape is continuously shifting, meaning banks need to be alert and responsive to customer needs, competitive pressures and regulatory developments.
Not only does utilising automation technology allow institutions to respond to emerging market opportunities, but it also means that they can maintain compliance efforts by effectively acting upon regulatory change as it happens.
This is because, with digital KYC profiles, they can have access to the critical data required for investigations while being able to monitor change and update customer profiles in real-time. This supports a rigorous, effective approach that fully automates the KYC search in as little as eight minutes.
By leveraging technology to automate and streamline processes, banks can have confidence that regulations will be consistently adhered to – with transparency provided by a full audit trail.
Put simply, the cost of inefficient KYC is too high to ignore. To safely operate, while putting the building blocks in place to scale and grow, automation technology can no longer be just a nice-to-have.
For every bank, remaining competitive and making the most of customer experiences while simultaneously responding to regulatory compliance obligations are key goals. Forward-thinking institutions know that trusting in automation to bring significant gains is the way to meet those goals.
Technology provides some of the most valuable competitive differentiators a business can leverage. It is time for institutions to unlock the vast potential before them if they want to get ahead of the competition – and stay there.
Steve Hadaway is Chief Revenue Officer of Encompass Corporation
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