A tidal wave of new regulations is coming, and it’s keeping KYC compliance officers awake at night.
From the Fourth Anti-Money Laundering Directive being implemented now to MiFID II and GDPR due next year, the regulatory framework we all work in is changing dramatically. And while the focus up to now has been mostly on banks and financial institutions getting their onboarding procedures in order, the new environment of tighter oversight is going to affect their clients just as much.
No longer will firms have the luxury of treating KYC as an intermittent obligation. Regulators will expect companies to know where their risks lie and have strategies in place to deal with them on a day-to-day basis. And if they’re unable to do that, the penalties will be heavy.
It won’t be sufficient for companies to say their compliance procedures are merely adequate. They’re being forced to address a simple question: Do we have the tools to deal with the welter of new demands?
Unfortunately, the answer for many will be a resounding no.
The processes too many companies will be relying on to keep in line with the new frameworks are slow, costly, antiquated and have been around for decades. They’re disconnected and disparate, and barely can be expected to cope with today’s requirements let alone the blizzard of new procedures they’ll need to handle even by this time next year.
But it needn’t be that way.
Regulatory technology can help companies overcome many of these burdens quickly and cheaply by automating the compliance process from end to end.
The benefits are apparent in the way it brings scalability to the process. On automated platforms, there’s no need to add costly human resources when workloads increase. Instead, they offer dynamic, current and comprehensive solutions that can be tailored to companies and tasks of any size.
Many companies are having to commit more and more of their revenues to KYC compliance because the methods they’ve been using for years are largely paper-based. That makes them subject to human error, loss or damage as documents have to be printed, signed, mailed and stored indefinitely.
Automation can condense that into a single, quick and continuous process.
At Know Your Customer we go a step further, transforming the time-consuming pre-deal certification process. We can deploy technology that checks multiple registries to unravel complex corporate structures, retrieves data on controlling entities and individuals, and identifies beneficial owners.
Our solution executes this in a rapid manner and then provides our clients with the option to let their customers complete the KYC process using their mobile device.
It’s a platform that meets the demands of our clients and the institutions with which they interact in an integrated way, and plugs KYC directly into a world that conducts its business, shops, pays bills, has a flutter on the horses or even seeks health checks via a mobile device.
Right now, we’re seeing other industries change out of all recognition thanks to the convenience of mobile transactions. From stock trading and wealth management to life insurance and bank borrowing, mobile is redrawing them all – and there’s no reason KYC should be excluded.
The KYC community has been slow to pick up on the mobile revolution that’s transforming the world. There’s an element of ingrained inertia that’s mitigating against that – managers and boards aren’t always keen to spend money on backroom processes.
But it’s been demonstrated throughout the financial services industry in the past few years that automation, especially through mobile technology, reaps rewards far in excess of the cost of implementation. Whether it be through efficiency savings, freeing up headcount to be redeployed to more value-added operations or simply through cutting wasteful onboarding waits, the time has come for KYC’s digitisation.