With banks and financial institutions demanding innovative solutions to Know Your Customer inefficiencies, how can jurisdictional managed services help?
The importance of innovation as banks and financial institutions (FIs) seek to meet ever-increasing demands on Know Your Customer (KYC) cannot be over-estimated.
Inefficient processes continue to significantly impact their annual KYC spending, while lengthy delays in gathering the required information are affecting the end-client experience.
Global regulators are now looking at ways to streamline regulations in order to help organizations better comply with the rules, as well as to encourage the widespread adoption of more innovative solutions.
This is where jurisdictional managed services can help drive change through a better client experience and the leveraging of data rather than endless strands of documentation.
Financial institutions are under immense regulatory scrutiny and pressure and, those that fail to comply, risk receiving hefty fines and a damaged business reputation.
Many banks have faced legal and litigation penalties in recent years for money laundering, market manipulation and terrorist financing.
In addition, banks must now track rule changes on a daily basis as the volume of conduct regulation has tripled in recent years and is only set to get tougher in today’s environment.
It’s not surprising, therefore, that more FIs are turning to a managed service to ensure their client onboarding issues and corporate duplicative requests are solved and that due diligence is carried out effectively.
The industry is in desperate need of standardization and consistency in regulatory requirements, although there is now a global drive towards achieving this.
And many global regulators are looking at ways to streamline regulations in order to make it is easier for organizations to comply with the plethora of rules that govern them.
To this end, many regulators are adopting a two-fold approach.
The first step is to improve the regulatory environment so that digital innovation in KYC can flourish and the second is to establish frameworks to provide guidance for compliance without being overly prescriptive.
Watch video — Adoption of innovation in KYC and client on-boarding
Better client experience
Dominic Mac, Global Head of Business Development, says that regulatory involvement and support are crucial for success.
He adds: “The regulator needs to be involved in policy alignment, but also to encourage widespread adoption of innovative solutions by domestic and international banks.”
Jurisdictional managed services bring together operational processes on behalf of subscribing banks.
By opening up regional data sources in a more scalable and technology-driven manner, there is an opportunity for a better client experience by creating fewer low value touch points with the FIs, and by leveraging data rather than documentation.
This applies equally to all types of FIs and regulated entities.