Balancing KYC compliance and customer experience

At a time of heightened customer expectations, financial institutions are facing intensifying pressure to make data collection for KYC as smooth and painless as possible.

The rules surrounding KYC and AML data collection can be cumbersome and add friction to key client touchpoints, such as new account opening and onboarding, taking time and making the customer experience more frustrating.

Smart Communications took a look at some actionable strategies for proactively managing the process of collecting information and backup documents for KYC in a way that ensures regulatory compliance whilst delivering a fast and easy customer experience.

The trend of opening new accounts completely online had been on the rise for some time but was accelerated by the implications of the Covid-19 pandemic.

Smart Communications pointed to research by Deloitte, which revealed that 63% of wealth management clients claim that online interfaces are a key component of satisfaction with their advisor’s firm.

And while this might be great news for consumers, it’s a massive headache for financial services firms that need to know exactly who these new applicants are. Running afoul of regulations because of not properly vetting applicants means more than just a slap on the wrist: financial firms have been fined $26bn in sanctions for AML and KYC non-compliance since 2008.

The best way to avoid non-compliance during account opening, Smart Communications said, is to see data collection for KYC processes as a component in a technology ecosystem designed specifically to minimize compliance risks. By leveraging key integrations, wealth management, superannuation and other financial institutions can automate the process of assessing a potential new client’s risk of non-compliance.

SmartIQTM, Smart Communication’s guided digital interview solution, uses the open APIs connected by the Conversation Cloud™ to automatically send data to third-party systems to validate client identity.

The solution also easily integrates with other tools that specialise in connecting data and case management for KYC risk assessments, such as OneSpan and Pega.

Smart Communications said a guided digital interview solution like SmartIQ changes the entire dynamic of client onboarding in financial services. Instead of the “dreary process” of filling out paperwork, advisors can transform onboarding into an enjoyable experience that sets the tone for the relationship early on.

There’s a huge difference between an exciting conversation around how best to secure a client’s financial future, and “First name? Last name? Address?” Advisors should ask themselves, “which experience would clients return to and tell their friends about?”

With the right technology, Smart Communications added, wealth managers no longer have to choose between strict KYC compliance and a fantastic customer experience.

Read the full post here.

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