Manual onboarding is a bank's highest-risk KYC process with the lowest rate of return. Automation can remove these hazards by taking on the responsibility of performing the grueling legwork. In this article we break down KYC process steps to identify which areas will benefit the most from automation.
Initial customer touchpoint
This is the starting point of a potential relationship with a new customer. It includes two important steps: client identification and risk assessment.
Identification
Banks can waste significant time trying to identify the correct legal name of the client. If a sales manager records this incorrectly, it can result in costly non-compliance. Further, there is a lack of understanding around the front-end for opening corporate accounts. It’s easy for a banking relationship manager to mistakenly use the wrong entity name; a local company may operate under a Doing Business As (DBA) name, or operate as a division of a larger holding company. With the right automation steps in place, you can unite various profiles under a single customer name and eliminate this common confusion.
Risk assessment
Using customer-provided documentation and information, banks must determine an initial risk rating of high, medium, or low. Information may include documents of company incorporation, shareholder data, or something else. Analysis of this top-level information determines the next steps. Not all prospects will be high risk, but due diligence is necessary at the beginning to avoid hefty fines later.
Due diligence
Due diligence requires several steps, all prime candidates for KYC automation. The manual approach requires large teams of analysts performing error-prone tasks by hand. The process can overwhelm banks with limited resources and time.
