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Seven golden rules to follow when implementing KYC process

By Nora Beqaj, Business Director, The Nest UK

Know Your Customer (KYC) is a regulatory requirement for all regulated financial services organisations to identify their customers. Banks must put faces to their client names during their authentication and onboarding activities to prevent illegal activities such as money laundering, terrorist financing or tax evasion.

Traditionally, onboarding has always taken place in person. However, FinTech companies have completely transformed and evolved consumers’ expectations for a banking experience. With the Covid-19 pandemic changing the way we all live and go about business, the digital transformation came at a crucial time.

The fight against fraud is a major stake of a Financial services firm’s business model. From the very beginning of any customer activity, it must be considered to avoid violating regulations. This risk requires implementing KYC processes that meet both the financial and legal stakes, but the key here is to execute without reducing flexibility and agility within the customer journey.

KYC processes require a delicate balance. They should be fast and efficient enough not to be dissuasive, but robust and rigorous enough to engender trust between both parties, most notably though they must ensure a seamless customer journey for the end-user. The perfect balance consists of people with the knowledge and technological capability to support and implement the process while ensuring the process is as efficient and seamless as possible. And this perfectly balanced execution can give a competitive advantage.

With this in mind, here are seven golden rules to follow when it comes to implementing KYC processes:

1/ One of the main challenges of emerging FinTechs will be to develop a seamless experience for their customers. Making client relations central to the KYC procedure is non-negotiable. It is an opportunity to improve the relationship with the end customer and boost their loyalty over the long term. Every business will need to invest in the customer journey as it will key to maximise transformation rates and avoid tarnishing brand image. Customer experience should be simple, fast and effective to ensure customer buy-in.

2/ End customers might have questions about completing the onboarding process or may be reluctant to provide required personal data to complete the KYC. It is critical to set up a dedicated telephone hotline right at the start of the project to give customers easy access to agents’ expertise. This will help solve customers’ problems and strengthen the relationship while and maximising the onboarding rate.

3/ Although the process of remote identification is continuously evolving, there is not a platform that can fully automate operations. While technology can accelerate processes and improve customer experience, people can provide value-added analysis, manual fallback and customers interactions. Consequently, falling back on an end-to-end solution mixing technological and human elements is the guarantee of operational efficiency and process optimisation.

4/ Because KYC is a complex and time-consuming process involving many legal, technical and organisational constraints that differ from country to country, businesses may be wise to outsource this procedure. Choosing a trusted and experienced partner will considerably ease international development and add flexibility and scalability with regulatory understanding.

5/ KYC isn’t just about controlling data and documents, it’s about building an end-to-end process. Results of these controls will not always be positive as they are highly dependent on the quality of the data and documents. You should anticipate rejection cases that could lead to breaking the onboarding journey. Building an automatic and multichannel reminder workflow is essential to stay in touch with the customer. Reminders can be sent via email, text messages or even via a human in a customer service outbound call. During this critical phase, effectively managing relationships with the customer is crucial and can be an excellent opportunity to strengthen client satisfaction and brand reputation.

6/ It is important to define a methodology that should include meticulous planning and topic-focused workshops to prepare for each project phase. Doing so can allow you to anticipate technical, operational, or human pitfalls prior to launching.7/ You should establish a reporting procedure with specific and measurable KPIs to monitor project achievements and make potential adjustments as needed. Building such a process will allow greater control of the project execution, ensure it is delivered on time, and will allow for minor adjustments to be made as needed.

These seven golden rules will allow a business to get the most from its KYC initiatives. KYC operations shouldn’t just be considered to prevent fraud. Instead, by leading to more transparency and security, KYC can act as a competitive factor to help financial services businesses enhance their reputation and build trust with their end customers. After all, this is one of the most valuable assets for any financial services business.

The Nest by Webhelp aims to support startups and scaleups to provide the best-in-class customer experience. The Nest enables fast-growing companies across all sectors to grow exponentially by offering a unique, tailor-made outsourced CX proposition.

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