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How to optimize KYC Operations: 4 ways to improve your compliance

It often seems to us that Know-Your-Customer (KYC) compliance is one of the toughest challenges facing financial institutions today. It doesn’t matter how much time, energy, and resources FIs put into KYC and Customer Due Diligence (CDD) efforts, they continue to struggle clearing compliance-related hurdles.

There are a few big reasons for this: most notably, that the regulatory environment is becoming increasingly more complex, with more and more requirements placed on FIs in terms of data collection, analysis, and reporting. But there are still a lot of tools and tactics that banks can wield to make KYC processes more optimized, efficient, and flexible than ever. 

Here are four smart ways that your financial institution can improve its compliance efforts...


Standardize KYC processes with CRM in mind

Know-Your-Customer procedures are challenging because they require compiling and updating such a large and ever-changing amount of diverse information. Often, this information can be difficult to ascertain, too, especially when it comes to determining ultimate beneficial ownership.

This process can lengthen customer onboarding time, and can also have an adverse impact on the client-bank relationship. To better toe the line between client satisfaction and due diligence, you ultimately need to find a way to make the KYC process as customer-focused as possible. The answer? Compliance experts and customer relationship management professionals need to work together to streamline and optimize all your KYC workflows.

  2. Automate in all the right places

There’s a lot of evidence that shows it’s not enough to simply provide customers with a digitized onboarding platform or process. And that’s because around 90 percent of customers who begin a digital self-onboarding process will never complete it. 

But that doesn’t mean that technology isn’t the answer: automating and introducing technological tools at key steps of the process is crucial to improving KYC due diligence. Workflow management tools, rule builders, artificial intelligence, and even blockchain technologies can all help streamline the KYC process when employed intelligently.

What’s important is investing in high-quality analytical tools and technologies, which can significantly ease the compliance burden placed on financial institutions, while freeing up valuable resources within the organization to make that onboarding process smoother.

  2. Focus on quality of data

  3. There are lots of reasons why the data collected by FIs may be of poor quality. Inconsistent or poor documentation across various jurisdictions, insufficient or hasty data collection methods, or any number of other potential causes can play their part. One thing is clear though: it’s impossible to develop effective KYC processes – even well-automated ones – when data is either low-quality or incomplete.
  6. Add Value to the Customer Experience

The biggest problem with Know-Your-Customer compliance is that it can sometimes negatively impact the customer experience: the more complex the regulatory environment gets, the more steps customers must take during onboarding and follow-up. 

Unfortunately, the fact is that KYC regulations aren’t going to become any simpler in the near future: if anything, they’re likely to continue to place even greater demands on financial institutions. To offset this, banks should look to put greater emphasis on the customer experience across all touch-points – not only during the onboarding process. 

This is yet another area where the right technology can be of assistance: investing in UX systems and customer visit management technologies can help round out and elevate the customer journey in a way that takes pressure off the pain point created by KYC due diligence. 

It’s also important to remember that KYC regulations aren’t necessarily the enemy here: when implemented in a well-optimized and well-integrated way, they can ultimately help FIs provide better service. The key is to look at KYC as part of the bigger picture, and to integrate it into your overall operations and procedures accordingly.


We’re here to help

At Eastnets, we have KYC products and solutions that can help your onboarding process run smoothly and securely, all while capturing the smartest data possible. 

To find out more, head over to our product page for Eastnets KYC.

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