KYC and how to get it done

KYC processes can be complex depending on factors like who is being onboarded, where, and for which products. So how do you get KYC done and done well?

Executing effective KYC

Failure to establish and execute the right Know Your Customer (KYC) procedures for your business and its customers can expose you to financial crime, damage your reputation, harm customer experience, and create inefficiency in your business – all of which costs money.

If you don’t know how to get KYC done and done well using a risk-based approach delivered through a blend of automation and human expertise, your compliance team is unlikely to be operating at full capacity and they may not be engaged doing the right things to protect your business, your customers and your revenue.

Conversely, knowing how to get KYC done effectively means fewer customers drop out of your onboarding process, creating more revenue, and they get a better experience of your company from the start. Good KYC also ensures compliance with regulation and it protects you against fraud and other types of risk and financial crime.

Seamless KYC processes

Removing delays and friction from your KYC process can build a reputation for being easy to deal with. It also signals that you are competent and secure – establishing trust in financial services is always a good thing with both customers and regulators.

There is a lot of competition in the market, so robust KYC compliance that delivers a great customer experience will be a competitive advantage. But, how do you execute the most effective KYC procedure for your business?

How do you ensure your approach to KYC is right for day one and that it can be evolved over time to meet your changing compliance needs?

We created a report with insight from industry experts to break it down for you. The paper highlights 6 areas to consider when it comes to good KYC processes and how to get them done.

1. Check understanding

It sounds obvious, but it’s really important to check everyone involved in executing your KYC procedure fully understands it. There can be lots of jargon used in compliance, and perhaps the team employed in the onboarding process aren’t seasoned professionals.

Sometimes sales people can be involved in KYC and they need to understand how to deliver effectively. It’s key to check understanding on an ongoing basis – no shame, no silly questions.

It’s also important to keep learning about compliance. This can relate to educating the business when compliance procedures change, or it can relate to personal development. With new regulations coming on stream all the time having a team member take the lead on understanding and interpreting that change can be truly valuable for your business.

2. Cross-team communication

Financial crime prevention is everyone’s business – it’s not something that sits inactive in the KYC policy. Compliance is a companywide action; it’s a behaviour and company culture plays a huge part in fighting financial crime. This makes communication about your approach to KYC and your tolerance for risk across different functions and teams crucial.

An example of cross-team communication on KYC could be sales speaking with compliance regularly about elements of the process or about performance of the process. This can help ensure an understanding and agreement on risk. It’s not feasible to accept no risk, yet it’s not wise to accept too much. If all parties speak, this becomes easier to execute in practice.

3. Increase transparency

Being clear on what is involved in the KYC procedure will obviously aid execution, but so will being able to help teams understand where cases are in an onboarding or risk management cycle.

Increased transparency about where a customer is in the onboarding journey provides context for teams to manage customers expectations and it can reduce friction both cross functionally and with new customers.

The right system can be helpful when it comes to knowing exactly what stage a customer journey is at.

4. Technology with the human touch

Technology can play a really useful and active role in effective execution of KYC. It can digitise compliance processes, speed up onboarding and automate data checks, many of which used to be manual.

However, technology can’t and shouldn’t do everything. There will always be a role for human intervention in the most effective KYC procedures. This could be when managing high-risk profiles or it could be when completing corporate onboarding, where manual reviews are essential.

Having the right technology that automates what’s possible and enables people to add value and achieve more is a good thing.

5. Freeing up customer-facing teams

Automating KYC processes allows compliance colleagues to focus on different and arguably more important tasks, rather than carrying out manual checks and sending endless emails.

Having an automated KYC workflow makes completing compliance tasks more efficient, which means firms can use people to delve into the more interesting aspects of risk management – analysis, judgement and decision making.

6. Embrace change

Change is the only constant in compliance. You might get your KYC policy right on day one, but you will always need to change and evolve it in the days to come.

New regulations. New product launches. New threats. Entering new jurisdictions. A better form of tech emerges. There are endless reason why you can and should embrace change.

The most effective compliance policies are live. And with the right RegTech you can make frequent changes to the way they are executed.

Get the report

Get your copy of PassFort’s full report, which has lots of practical and useful information about KYC and how to execute it effectively.

This paper is part two in a series of three reports designed to help you establish, execute and review effective KYC. If you would like to get the other parts in the series, please go to the Resources/Reports area of PassFort’s website.

Get in touch

PassFort is expert in compliance automation, bringing humans into the KYC process where they add most value. They would love to talk to you about your KYC processes to understand what you’re doing now and to see how they could help you create more efficiency and deliver better KYC in the future.

Please get in touch anytime to arrange a chat.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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