It is no surprise that with ever more stringent legislation,
especially in the realm of anti-money laundering and beyond, all-too-often
one-size-fits-all policies and regulations are stifling growth and
exponentially increasing the onus on business across sectors and industries,
but ever more so in the financial services provision industry.
Regulatory burden is regularly cited as the main problem
area for banks and financial services providers across both sides of the
Atlantic, and beyond, with 3 of the top 5 reasons all being directly
interlinked with the shifting up of gearsby regulatory bodies, namely KYC, transaction monitoring and the ensuing
Equally unsurprisingly, this situation has two direct and
immediate effects in the banking world: a) the gradual and relentless
disappearance of community banks and smaller banking operations, with over 25%
of all outfits with capitalisation of less 100 million USD disappearing over
the course of the past 20 years as reported by the American Banking
Association, and b) regardless of size, the increased aversion to risk by
financial services provider across the board.
While the former can be partially explained away through
mitigating factors such as conglomerate mergers and turbulent market conditions
over the past two decades, the latter is a consequence of the continued
inability to effectively adapt and comply efficiently with legislative
requirements, the demands posed by which are hardly going to be alleviated and
will only see thresholds lower and the net widening.
As clearly shown by the findings of the 2016 Thomson Reuters
survey, the average cost for KYC and CDD compliance by financial firms isapprox. 60 million USD, shooting up to 9
times that in a number of cases.The
industry’s response to the increased demands posed is an almost disingenuously
simple one: throw more resources and money at the problem and pray it sorts
In reality, the opposite has been found to be true:
onboarding times are on a steady increase, estimated to take 50% longer in 2017
than they did in 2015, with customers’ responses directly contradicting the
banks’ belief that correct, timely and full ongoing information was being
provided (hence putting into question the veracity and therefore validity of
the exercise itself).
Struggling to keep up with requirements at onboarding stage,
it is even more worrying to note that financial services providers of all sizes
and types are further unable to keep abreast, efficiently or otherwise, with
the ongoing vetting and risk assessment due on past approved applicants.
As a consequence, the industry’s inability to keep up and to
manage the additional impositions has seen the appetite for exposure being
directly impacted, with all the snowball effects that this has on bottom lines,
the economy and the future.
Effectively financial service operators are increasingly
becoming more akin to information warehouses, and no amount of increased human
resource spend will ever be sufficient to manage the volumes of data requiring
processing.The increased reliance (if
not total dependence) on ever growing specialised risk and fraud teams has
created an inevitable bottleneck and a false sense of security that an
acceptable minimum is slipping through the cracks, when the facts and figures
While financial providers are having to allocate a growing
percentage of their non-interest expenses (estimated by the Federal Reserve to
be around 9% in most cases, down to around 3% for outfits with asset valuations
between 1-10 billion USD) to cover specialist resource costs, make up for
losses incurred through miscalculated risk and fines levied for regulatory
non-compliance, facts and figures squarely point that the situation is entirely
The latest developments in the FinTech and RegTech universe
however offer a clear and cost-effective solution that allows for specialised
efforts to be refocused, automating a huge portion of both the new customer
onboarding process as well as the maintenance and ongoing assessment of client
portfolios, enabling risk and fraud efforts to be redirected where it really
matters – the upper percentage of customer accounts that are to be considered
of medium-high risk.
In a world full of customer onboarding tools, data analysis
software and customer screening services, KYC Portal stands out
squarely by uniquely providing a fully tailored and customised platform through
which true automation can be achieved. KYC Portal simplifies and delivers
efficiency gains across the entire prices, from the initial acquisition of
customers through to the automatic determination of the exposure posed
according to the currently prevailing risk appetite internal to the
organisation or department, the full KYC and AML compliance, irrespective of
the operation’s jurisdictional requirements and the fully automated ongoing
assessment of all clients.
Connecting independently and seamlessly to any third-party
service providers of choice (be they screening services, document verification
providers, external data warehouses etc) and internal data sources alike, KYC
Portal opens up a previously untapped realm of data management and analysis
opportunities that directly impacts operational efficiencies (with improvements
of over 60%, by the most conservative of estimates) through the significantly
reduced time frames required to onboard new clients, the drastic reduction of
touch points during the process and the delegation of the initial data
collection away from the specialised risk and fraud core.
Through a trigger and alert notification system, KYC Portal
effectively sifts through new customers and automatically (based on predefined
parameters reflecting the organisational procedures and practices) segment
applicants based on their risk value, removing the need for intervention on the
low risk or the ones beyond acceptable risk thresholds.In this manner specialist attention is
refocused exclusively where it is needed – the high value but equally higher
Even at extended due diligence stages, KYC Portal offers a
plethora of unique tools easing, speeding up and further securing the process,
not least amongst which are the in-built, plug-in free face-to-face video
interview recording and storage technology, facial recognition and customer
overview dashboard tools ensuring that human bias and limitations are totally
done away with at all points in the process.
Following onboarding, KYC Portal automatically queries all
existing customer records on a continuous basis, against any number and type of
external and internal data sources, to ensure that any changes in status and
background of all accounts is immediately flagged and notified to the correct
personnel, as are any changes in documentary validity and requirements.
Operating on a highly notification logic, KYC Portal’s
infinite customisability not only ensures that no single trigger goes
unalerted, but equally that no resources are wasted onunnecessary investigations andaccount queries.
Building on an infinitely scalable and modular architecture,
and married to a pure risk-based logic set, KYC Portal offers a plethora of
additional modules which include transaction monitoring and assessment, with
automatic notifications occurring in real-time whenever preset rules and ranges
are triggered on an individual basis.