How To Improve Know Your Customer Processes? Here’s A Multi-point Guide

By Author: Linqs Inc
Total Articles: 59
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Banks, corporations, and financial institutions have this regulatory compliance measure – Know Your Customer (KYC) – as ascertaining Due Diligence for the client onboarding and monitoring. However, inadequate or outdated, legacy systems for Due Diligence instill inefficiency, extraordinary costs, and redundant procedures. Here, we discuss the inclusion of automated systems for KYC and similar risk identification procedures.

Consumers all around the world expect their service provider to be polite, approachable, and flexible. Typically, the Know Your Customer or KYC is nothing short of harassment in some organizations. The blatant misuse of procedures and inappropriate measures make general people look like accused. Hence, the digitalization of KYC processes in a realistic approach can address a wide range of issues, including those affected by lack of interdepartmental collaboration, non-vision of target operating model, and unclear business definitions.

How to improve KYC?

Identify the pain points, bottlenecks, and solve them. It’s quite easily said than done, but this is the tangible way of uprooting ...
... problems. A team comprising members of the organizations must perform analysis of challenges, such as conflicts, prioritization, user experience improvement, de-risking, and so on.

Though digitalization has helped mobile onboarding of clients in some financial institutions, the associated performance is abysmal. If opening a bank account for a client takes the processing time of 2-3 months, then there’s no reason for acquiring the digital process for boarding them. A staggering 90% dropout rate for this method highlights what’s wrong.

Labor-intensive procedures, costs, KYC risks, etc. admonish about the wrongs. Organizations failing to identify these crucial challenges may not see the end of the tunnel at all. This is why developing a target operating model becomes critical. Concrete objectives like goal definitions, target process definition, data model definition, and target organization definition facilitate swift management.

BPM Software, Rules Engines Software, Scanning and ID Solutions, Blockchain, RPA, Artificial Intelligence, Analytics and Screening Tools for Know Your Counterpart processes, app and channel integration, etc. are superior technologies that help an organization to find solutions. Having a strategy here is the key to establishing a perfect data model, IT infrastructure, sustainable ecosystem, and audit-proof approach.

Perhaps, a few organizations may refrain from adopting automated systems in the fear of extraordinary costs and miscellaneous expenses. Nevertheless, they can follow through modern yet affordable systems for relevant applications.

Automated Screening Software and Export Compliance

Trade compliance consultants help exporters in creating an Internal Control Program or ICP for maintaining alignment with regulatory compliance measures. As of now, various companies have utilized automated screening software for adhering to the ever-changing export regulations and controls.

These tools for export compliance enable quick processing of parties or partners or suppliers or customers or traders, but through a cost-effective manner. Additionally, cloud computing platform services disable the outflow of monies for compliance measures.

With more and more institutions and organizations gathering around for technology-driven efforts, the advancements in systems seem promising. With new entrants happening to every industry, there’s no doubt high-risk profile identification would cause any problem.

Author Info:-

Linqs Inc explains the hierarchy for Know Your Customer processes that hamper Due Diligence processes. As he recommends building strategies for Know Your Counterpart processes, he also quantifies and qualifies the role of technologies for managing screening methods, especially for trade or export compliance adherence.

Linqs software helps you with Anti Money Laundering (AML) and KYC screening of customers or trading partners before entering a deal with them.