In today's globalised economy, Know Your Customer (KYC) is an integral part of financial services operations, helping to ensure a stable and reliable financial framework in the face of emerging and evolving risks such as fraud, money laundering and other types of financial crime.
A proven and effective KYC process helps to ensure that customers benefit from a smooth and rapid on-boarding process and relationship management, and provides confidence in a financial player's ability to manage risk. However, many financial players are struggling to modernise their KYC processes due to a "patchwork of disparate and fragmented technology architectures", still burdened by the legacy of their information systems. The data processed is fragmented, located in several systems or software, revealing manual processes, high costs and operational risks to bear, all to the detriment of the customer experience and the quality of the business relationship.
In today's globalised economy, Know Your Customer (KYC) is an integral part of financial services operations.
With this in mind, there are very different attitudes to KYC, creating an imbalance and perceptible risks within the financial community, leading players to approach KYC with either an offensive or defensive mindset.
Offensive minds promote a culture of care and intimacy with their customers and encourage the review and transformation of their KYC value chains.
In contrast, defensive minds are content with a traditional view of compliance, seeing KYC primarily as a risk-avoidance exercise, focusing on the compliance and reputation management aspects of KYC.
Restructuring a KYC process is a delicate process involving every facet of the organisation with extremely complex but unavoidable consequences - operational, relational, technological and legal.
Offensive 'Client Centric' minds are rethinking the KYC value chain in depth in order to make it more fluid and improve its operation, while ensuring that the expectations of their customers, employees and shareholders are met.
An initial diagnosis will be made in terms of governance, standards and controls, but above all they will focus on the quality of their data, which is the keystone of their target operating models.
With this in mind, the preferred approach will be to adopt a centralised repository, since this guarantees that you will be working in a freer and more serene regulatory climate. This will make it easier to manage data quality, ensure the uniqueness of customer information, and apply data governance with strict rules on its use and handling.
From an RGPD point of view, by centralising and orchestrating information and exchanges, it will be easier to comply with the constraints of the regulations. Offensive minds will have a better view of how their customers' personal data is being used.
To meet this challenge, i-Hub offers a strategic centralised repository, the KYC Partner, which uses a highly sophisticated data model supported by powerful technologies such as optical character recognition(OCR), artificial intelligence(AI) andautomation to improve the efficiency of its KYC/CDD process. This entire technological structure is operated by highly qualified KYC experts who analyse and validate the data/documents collected and act as a "third party validator" in its customers' KYC process in order to convey a "clear verdict" on the KYC file processed. Verification by a third party, such as i-Hub, guarantees the transparency, reliability and accuracy of the data/documents.
In addition, i-Hub enables KYC data/documents to be pooled and shared, while respecting strict professional secrecy and its clients' tailor-made risk-based approach, in order to enhance the client experience and better reposition them in their business relationships by making them actors in the information they wish to share or not.
The only way to avoid sanctions and fines is to implement robust, dynamic KYC controls.
Financial players need to be aware of the risk that certain customers may represent. Some of them have received substantial fines for failing to regularly check their high-risk customers.
They are under so much pressure to step up their controls that they are gradually abandoning the periodic review and adopting a more dynamic KYC approach by encouraging ongoing maintenance of their KYC files.
So the only way to avoid sanctions and fines is to put in place robust, dynamic and real-time KYC controls that enable the right decision to be taken on the basis of the right information about the follow-up to be given to a customer or prospect.