Mastering compliance: An insight into the power of orchestration tools

Mastering Compliance: An Insight into the Power of Orchestration Tools

As businesses deepen their digital capabilities, an orchestration tool becomes vital. When leveraging various tools, systems and datasets, firms need a single location that brings all this together, rather than forcing users to juggle everything.

So, what is an orchestration tool? These are tools that collate systems into a centralised location to give the user a central view of a subject. By giving the user a holistic picture, it allows them to become more efficient with their operations, but also make better decisions as data is not locked off in silos. However, orchestration tools are even more powerful when it comes to the world of compliance.

Kristoff Zammit Ciantar – founder and CEO of KYC Portal, said “Orchestration within the industry of due diligence and compliance is even more crucial due to the RISK exposure. Risk is governed by a lot of factors within the same department of an organisation. Be it regulatory driven factors, ESG, credit, geographic impact, adverse media, internal policy and even brand reputation, risk is a calculation that is done using quite a lot of factors on a subject.”

Each of these factors are linked to data points, however, this data can be stored in different solutions across the organisation based on where in the customer lifecycle the information was generated, he continued. For example, source of wealth and company structure charts are derived from onboarding, while transaction data comes later in the customer relationship. Then there is information that is stored on internal core systems or CRMs. Adding to the complexity is that some data comes from third parties, such as credit rating or adverse media.

He added, “All such data points will have an impact on risk, and the only way one can achieve real time risk assessment on all subjects is by orchestrating (or integrating) all such data point sources into one central solution such as KYC Portal CLM to be able to have a real time risk engine that is using such data points to calculate risk.”

The problems of disparate systems

As major financial institutions have been steadily upgrading their digital infrastructure over decades, it is natural they will have disconnected systems. Unfortunately, this creates silos and damages the efficiency of employees. Zammit Ciantar even described disparate systems as “stumbling blocks in even adopting new technology on the market.”

On average, compliance teams use five systems on a daily basis, he said. These are the internal core system, the CRM, third-party systems for screening and company house data, credit rating systems and transaction monitoring systems. Workloads within compliance teams are already intense and forcing them to connect the dots between all these systems just makes tasks harder, more time consuming and prone to error. It also means work becomes backlogged, forcing the company to hire more staff and risk being fined for missing deadlines.

However, “The most challenging part of having data in so many disparate systems, however, is the ability of having a centrally automated risk calculation engine that works in real time. Calculating risk in such an approach would require manual intervention and very customised integrations which would fail the second an existing third-party system is changed or a new source added.”

By implementing an orchestration tool companies can collate their systems so compliance teams can access everything they need from one location and implement these automated risk calculation engines so they can focus on more important tasks.

The single customer view

The importance of good customer experience has been well documented over recent years. For example, a report from Bain & Company claimed that companies that excel at customer experience grow their revenues 4%-8% above their market. There are countless stats that show the benefits firms can expect from improving their customer experience. However, many are still lagging behind.

A recent report from Deloitte claimed that nearly 40% of customers abandon onboarding processes in digital channels. The main reasons for this are because the process is too long, or it requires more information than they are willing to give. With customers happy to quit something due to lengthy processes, firms should try to keep requests for information quick and never repeat questions later in the customer journey. A report from Salesforce found that 54% of customers believe companies do not share information across teams. This is often a problem caused by not having connected infrastructure.

Zammit Ciantar added, “One of the biggest inefficiencies is the fact that with disparate systems an organisation would find it very difficult to create a single customer view. This is a technical inefficiency within organisations that leads to higher risk exposure as well as repetitive tasks for same subjects being onboarded. This then leads to data and task replication, leading to higher costs and slower processes.”

Orchestration platforms like that offered by KYC Portal allow for companies to create this single customer view, even though that customer’s data might be stored across multiple internal systems, in different places and with different IDs. This allows KYC Portal to reuse data points that are common to the subject, irrespective of where and how many times that subject is involved.

“One example is the PROOF OF ID. This type of document is made to stick with the subject in such a manner that if this subject shows up again under a different structure or involved within a different service, there is only one document. From a customer experience perspective this is a great feature as you would not need to ask the customer for the same data, documents and questionnaires multiple times.”

As for the company, this tool boosts efficiency and is cheaper as they would only have a single document to verify, check for expiry and audit, irrespective of how many times this subject is onboarded. On top of this, the single customer view streamlines other aspects of due diligence, such as the ability to run a screening check, face to face verification and much more.

Transforming compliance through connectivity

Technology is no longer optional for compliance teams, especially as the level of regulation increases. Zammit Ciantar said, “The process of due diligence and KYC has become so onerous that automation is the only means of survival for organisations. The AML directive is becoming more stringent on a yearly basis however companies are also implementing internal policies to protect their brand from reputational damage.”

A system that enables orchestration of all risk factors into a central solution to create a real-time, automated risk assessment helps companies reduce their risk exposure and reduce the cost of maintaining risk, he added.

The need for perpetual KYC is gaining momentum and this orchestration layer allows companies to be prepared. Perpetual KYC is a method of ongoing customer monitoring that ensures a business has an updated view of the customer risk. Through this, firms have a real-time understanding of risk exposure and help boost decision making to mitigate that risk.

“Automation of compliance processes removes the need as well as the cost of periodic based reviews as any action would be flagged on the day that the organisation is actually being exposed to risk itself,” Zammit Ciantar said. “Compliance teams can then focus their time on onboarding new subjects which directly leads to a greater bottom margin, than having to waste their time on keeping up with the ongoing obligation of ongoing relationships.”

What makes KYC Portal’s orchestration layer the best?

KYC Portal is the industry’s most dynamic client lifecycle management solution. Clients of any size can use its CLM to collate all information into a centralised location and use fully customisable parameters, fields, rules, user rights and collaborative practices. Its features include risk assessment programmes, infinite custom entity types, associated mandated documentation, data fields, interview questionnaires and required process checklists.

The platform serves as that orchestration layer, empowering companies to connect their different internal data points and 3rd party providers to build that holistic view. It offers various ways of allowing these integrations, with the most commonly used being the REST API. This allows any development teams to push and pull data between systems.

“KYCP also allows clients to integrate with internal systems using rule-based triggers and webhooks. A system that allows KYCP to trigger webhooks in internal systems based on certain rules firing. For the more complex scenarios KYCP has a scripting engine that allows our customers to create their own logic and algorithms within KYCP itself without changing any code of the solution.” On top of this, KYC Portal can integrate with any third-party data provider that clients request for the purpose of screening, company house data, credit rating and more.

Zammit Ciantar explained that there are two core features that make KYC Portal’s CLM solution better than competitors. The first is the fully dynamic configuration of its engine. He said, “When integrating so many different systems, receiving and sending so many data points relating to the same subject, it is crucial to have the flexibility in designing the central record in the most efficient way.” KYC Portal allows clients to configure the entire engine all the way down to the type of entity, fields for each entity, documents, risk and more. “This allows clients to integrate unlimited data points into one record,” he added.

The second differentiator is the level of automation that can be completed through the platform. Its risk algorithms are fully configurable so customers can associate risk, allocate weights and combine scoring on any data point they create. The workflow engine is also fully automated, allowing compliance teams to design what should happen to an application based on real-time data, as well as communicate this with other integrated systems.

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