Don’t sleepwalk into a KYC arms race

28 November 2017

Pressure from regulators and fear of getting it wrong have turned Know Your Customer (KYC) into an arms race of ever more stringent KYC procedures. The time is right to review these KYC policies and procedures and decide what is actually required and get rid of what is unnecessary.

Every Wednesday, for the next six weeks, I’ll explore each of the five areas below and discuss why we should opt-out of the KYC arms race.

5 reasons why the time is now:

  1. Time is moneyKYC takes too much time and is very labour intensive. Robotics and automation is the way forward to help take the long laborious tasks away and allow the banks to focus on the risky subjective areas.
  2. Risk-based approachThere is no benefit to treating all customers as high risk, applying the same onerous procedures to everyone. Do what is appropriate, nothing more and nothing less.
  3. Keep it simpleToo many complex processes and procedures evolve over time, which means the chances of them being followed correctly are low. By simplifying one standardised set of policies and procedures it shows that the whole organisation is working to the same clear goals.
  4. Tick-box exerciseThe longer the checklist of requirements, the more likely that the KYC process becomes a tickbox exercise. This misses the point of performing KYC, just because you have a list of documents, doesn’t mean you know the client!
  5. Customer is kingKYC can be a painful experience for customers, unclear requests and the length of time the KYC process takes can result in customers going elsewhere. KYC and the associated customer experience has become a key differentiator. Embracing technology can help streamline the KYC process improving or reducing customer interactions.

We have assessed and benchmarked many banks’ policies and procedures. We know what good looks like and more importantly what is appropriate and what isn’t. Don't sleepwalk into a KYC arms race. The time has come to make KYC better, faster, and cheaper.

Join us over the next six weeks, where we will dive into each one of these reasons in a bit more detail.

Imran Farooqi | Partner
Profile | Email | +44 (0)7711 924681
Follow @ImranFarooqi


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