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KYC: Effective shouldn’t be expensive

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KYC (Know Your Customer) can be cumbersome and expensive. The onboarding  process, with multiple checks, can consume vast amounts of time and resources. Often it seems like a burden, which is frustrating for a such an essential process. Typically, challenges include:

  • Complex regulations make it difficult for financial institutions to keep up.
  • Operating in multiple jurisdictions which means they need to comply with a variety of different requirements.
  • The KYC process can be slow for clients, which can lead to frustration and abandonment.
  • Many financial institutions are still using outdated compliance systems that are not efficient or effective, potentially meaning that KYC is neither.
  • KYC data is often siloed in different systems, which can make it difficult to get a complete view of a client’s risk profile.

Caution Drives Up Costs

Combined, a failure to deal effectively with these demands can render any organization inefficient, with still rising costs. According to recent data*, 2023 saw an average increase of 17% in KYC costs, and an increase of 11 days to approval. Costs now range from $2500 to $3500 per review.  And once a client is fully onboard, outdated transaction monitoring systems often generate false positives, which can waste time and resources. Frustration increases, including the client’s.

Automation – Overcoming Hesitancy

Fortunately, automation is widely recognized as a potential solution to streamline KYC processes, freeing up human capital to focus on more strategic tasks. However, many organizations are hesitant to embrace automation due to concerns about inadvertent non-compliance – fear based either on ignorance or experience of early systems that lacked the sophistication to handle ever more complex regulation. This result is businesses maintaining high staffing levels for KYC, further adding to the cost burden.

While automation holds the key to unlocking cost-efficiency in KYC, selecting the right compliance service is crucial. Many of the available systems excel in specific areas, but fall short of providing comprehensive compliance on a global scale.

Making KYC Pain-free

The ideal solution would be a service that delivers not only quick, frictionless and comprehensive KYC, but also faultless ongoing transaction and behavior monitoring. Additionally, such a service must be user-friendly and adaptable to the specific needs of each financial institution.

The good news is that the ideal already exists: Compli from Essiell Compli. Designed with user-friendliness, affordability, reliability, and comprehensiveness in mind, Compli offers holistic KYC and Customer Due Diligence solutions – empowering financial institutions to streamline the way they ensure compliance. Importantly, with its high degree of automation, Compli is one of the few services that really is comprehensive and affordable. Thus, it provides a way to stabilize compliance team staff numbers, speed up KYC and (naturally) provide the high quality of data necessary for fully informed decisions.

To complement necessary KYC checks, Compli can also overcome data silo concerns when working with partner organisations. And for each individual client it creates a unique ‘global person’ profile to provide accurate evaluation, not only at onboarding but during transaction monitoring too.

Moving ahead

In financial services, the importance of KYC is well understood, as are ongoing compliance requirements. The need, therefore, is not to re-invent the wheel. It’s to make sure the wheel you choose works perfectly, consistently, and in a way that helps your business move forward – Compli could well be the answer.

By Declan Morton, staff writer at Essiell Compli.


* The Future of KYC: Adapting to New Challenges in The Banking Sector, Fintech Global, January 17, 2024

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