Why KYC automation is key to business growth strategies
Across financial services, we are seeing increased pressure for digital transformation, as customer expectations rise and banks look to maximize business efficiency to drive growth and ultimately boost the bottom line.
Alongside this, in terms of regulatory compliance, the UK Government has recently introduced the Economic Crime Plan 2 and other measures to combat the pressing issue of economic crime, which is an ever-present reminder of the need to balance this pursuit of growth with fulfillment of compliance obligations.
Traditionally, when it comes to Know Your Customer (KYC) activities, and especially 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, that can ensure continued compliance while increasing efficiency across the board.
To deliver on customer and regulatory expectations, as well as remain competitive in a crowded market, they must now rely on the technology available to them. Not only can results be significantly improved now by doing so, but future benefits will also be realized as the KYC operation will be set up to handle ongoing business growth.
Find the impact
For institutions in the process of transforming their KYC processes, spending on technology that can have an undeniable impact is essential.
While the UK has avoided a predicted tech recession so far, businesses still need to be mindful when allocating budgets, making 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’s important to stay ahead of the curve when it comes to compliance. KYC is an important component, allowing institutions to verify the identity of clients and flag potential risks, and an overall 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 survey, increasing overall output and ultimately profitability.
Effective customer experience
Not only can automation result in a positive return on investment through efficiency and improved processes, leading to overall growth, but as mentioned, it also improves the customer experience, especially at the adoption stage.
Traditional processes require extensive documentation and verification, which often results in lengthy implementation times and lost revenue opportunities. In addition, employees managing these processes are often overwhelmed by constant controls and the ever-changing regulatory landscape, which can lead to reduced productivity.
The way businesses can keep up with and drive growth is by using automation, focused on real-time research. Automating the manual due diligence process performed by KYC analysts can reduce the onboarding period from 12 to two days, giving customers a faster and much better experience overall.
Another game changer connected to technology is that with automation, digital KYC profiles can be built in minutes, instead of days or weeks. This removes KYC bottlenecks, removes much of the burden from analysts and reduces the time to act by over 40 percent, providing a more rounded, smoother service that increases staff morale, as well as providing satisfaction externally, resulting in increased loyalty.
Streamlined systems
KYC compliance is an ongoing process, with the regulatory landscape evolving rapidly.
Compliance teams need to stay up-to-date with the latest regulations and policies to ensure their organizations meet obligations. Automation enables consistent, streamlined compliance, providing real-time access to the critical data required for investigations, while helping to monitor regulatory changes and update customer profiles in real-time. This provides a more robust, efficient procedure, which fully automates the KYC search in eight minutes.
For banks and financial institutions to thrive today, it is crucial that they utilize the best in technology. With automation, organizations can see a positive impact on every facet – from processes to satisfaction and ROI – that will help drive meaningful long-term business growth.
