The evolution of Corporate Digital Identity technology in banking

By Alex Ford, President, North America at Encompass Corporation

In today’s modern financial services landscape, Corporate Digital Identity (CDI) is rapidly emerging as the lynchpin when it comes to solving the challenge of the identification and verification of corporate and institutional clients.

Facilitating a truly customer-centric approach to client onboarding and Know Your Customer (KYC) processes, CDI combines real-time data in the public domain with data acquired from clients privately to deliver ready-made customer profiles into internal systems. These can be tailored to meet specific regulatory requirements and risk appetites. For institutions, this unlocks entirely new operating models that present immense opportunities for banks and customers alike.

As a consequence, banks can see dramatically improved business outcomes, powering the path to sustainable growth and profitability. By taking tangible action that addresses a problem they have struggled to address up to now, despite significant investment, banks can achieve a deeper and more widespread level of cost efficiency.

The challenges hindering current processes

In recent years, we have witnessed retail banks transform KYC, the customer experience, and, in turn, their commercial outcomes by leveraging digital identity. However, in contrast, a unique set of circumstances, such as a lack of unified corporate identity standards, transparency and access to business information, represent hurdles for corporate, investment and business banks when it comes to making similar strides.

Without this unified picture, banks must curate and create their own view of an entity to perform KYC involving a vast amount of public and private data. This view will then change in line with fast moving regulations and geopolitical developments.

Current efforts to overcome this are focused on either allocating more human resources to the issue or building homegrown solutions. However, people are expensive and manual processes introduce errors and risks. Money spent on building internal solutions is often wasted as these mammoth projects stall or halt altogether due to limited resources, a lack of skills or competing business priorities,

As a result of these inefficient practices, many businesses are still waiting up to 120 days for access to accounts and services. In today’s pressured environment, this is simply not sustainable, and they are, as a consequence, responding by abandoning long and arduous processes in their droves. The result? $3.3 trillion in lost revenue.

This is one problem that cannot be solved by doing more of the same. A completely new approach is the only solution.

Transforming approaches with CDI

KYC, especially at the point of onboarding, should be seamless, thorough, and consistent. This is why CDI is transforming the landscape. Dynamically generated from the most up-to-date authoritative public and private data sources, CDI profiles contain all the attributes and documents needed to make and – crucially – evidence sound business decisions.

Designed to be leveraged directly within internal systems, CDI ensures banks are provided with a consistent and accurate view of a customer at all times. Complex and disparate information is distilled into a digestible profile that persists through downstream activities, reducing processing times and costs. When implemented, the gains at play are clear, with CDI bringing the potential to drive efficiencies of up to $700 million over the course of five years. These efficiencies, imperative to business success across the board, span all functions, from operations to the front office.

With CDI, corporate customers can also benefit from the same seamless digital journeys they experience in their personal lives. Thanks to a quick and smooth process, abandon rates can be reduced by 20-40%, further fuelling growth and improving profitability.

With its fresh approach to enabling business with corporate customers, CDI addresses the most pressing challenges facing banks like never before.

For forward-thinking institutions, CDI can be game-changing, with its evolution marking a significant shift in the way banks tackle identity verification. As well as improving compliance outcomes, it also allows for new, far-reaching potential to be unlocked when it comes to identifying revenue building opportunities and supporting long-term growth.

Paving the way for a future that puts the customer at the heart of the experience will bring hugely positive outcomes for all parties. Banks that take the chance to embrace the unique potential that CDI offers will put themselves in the position to reap the benefits during a time when digital identity is key to an evolving ecosystem.