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Five steps to follow when implementing KYC process

Five steps to follow when implementing KYC process 1

By Nora Beqaj, Business Director, The Nest UK and Nicolas Dambrine, Deputy General Manager of Webhelp KYC services

During the past year, FinTech companies have had the opportunity to transform consumers’ expectations for a banking experience. This recent transformation has driven the adoption of digital processes in an industry that has adhered to legacy ways of working for far too long.

Start-up or not, the fight against fraud remains a major stake of a Financial services firm’s business model. From the very beginning of any customer activity, businesses must take this into account to avoid violating regulations.

To prevent illegal activities such as money laundering, terrorist financing or tax evasion, banks must prioritize facial identification during authentication and onboarding activities. Know Your Customer (KYC), a regulatory framework for all regulated financial services organisations, can help banks shape a comprehensive customer identification practice.

Implementing KYC processes that meet both the financial and legal stakes without reducing flexibility and agility within the customer journey can be challenging. KYC processes should be secure and expeditious. At the same time, they must be robust and accurate to establish trust between both parties. Most importantly, this must guarantee a seamless customer journey for the end-user.

The right people with the knowledge and technological capability to support combined with a seamless and efficient process can give businesses a competitive advantage.

We’ve put together five essential steps that will allow a business to get the most from its KYC initiatives:

  1. Invest in the customer journey:

To establish their position in the market upfront, FinTechs need to develop a flawless customer experience, so the KYC procedure must be built around client relations. Every business will need to invest in a customer journey that is simple, fast, and effective to ensure customer buy-in. Those who see this as an opportunity to improve the relationship with the end customer will boost brand loyalty over time while maximising transformation rates.

  1. A mix of human agents and technology:

In high-value industries like banking and finance, customers prefer human interactions to address and resolve issues quickly. It is critical to offer customers a dedicated telephone hotline where they can access agents in real-time. For example, during the KYC process, end customers might have questions about the onboarding process or may be reluctant to provide required personal data.

Although remote identification is continuously evolving, there is not a platform that can fully automate operations. Building an end-to-end solution mixing technological and human elements can support operational efficiency. Given KYC is a intricate and time-consuming process including many legal, technical and organisational restrictions which differ from country to country, businesses may be wise to outsource this procedure.

  1. Consider your end to end process:

KYC is all about building an end-to-end process, though strong data and documentation are vital to support this. An automatic and multichannel reminder workflow is essential to keep an open line of communication with the customer. Reminders can be sent via email, text messages or even during an outbound customer service call. During this critical phase, effectively managing relationships with the customer is crucial and can be an excellent opportunity to strengthen client satisfaction. It’s important to remember there will be rejection cases that can impact the customers’ onboarding journey.

  1. Define your methodology:

Likewise, it is crucial to define a methodology to prepare for all phases of the KYC process effectively. Meticulous planning and topic-focused workshops will allow you to anticipate technical, operational, or human pitfalls before launching.

  1. Define and track KPIs:

Building a reporting procedure with specific and measurable KPIs will enable you to monitor project achievements and make potential adjustments when needed. Creating such a process also allows for overhead on project timelines and execution.

Remember, KYC operations aren’t only for preventing fraud. By leading to more transparency and security, KYC can also act as a competitive factor to help financial services businesses enhance their reputation and build trust with their end customers. Today, KYC can be any financial services business’s most valuable asset if used correctly.

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