Any time you are engaging with a financial institution for the first time, there is the dread that comes with endless paperwork and request for documentation. Know your customer (KYC) procedures continue to lengthen customer on-boarding which often leaves the customer frustrated based on the increasing number of relationships that they have with financial institutions.
From an institutional point of view, enhanced due diligence delivers detailed background checks to avoid fraud and other related crimes. However, most institutions have found these processes to be increasingly burdensome both in terms of time and cost.
The different KYC approaches by institutions reflect a variety of regulatory requirements that differ globally. Where detailed guidance is lacking, institutions often lean toward caution and raise their KYC standards beyond regulatory expectations which further frustrates the customer and increases the cost and time for on-boarding.
As a result, consortiums of banks, governments and vendors are increasingly coming together to work towards reducing costs and improving customer service through the establishment of industry-wide KYC processors or utilities with the intended aim of standardising KYC processes.
KYC utilities address many of the challenges that both customers and institutions experience. For institutions, there are better risk outcomes based on improved data quality, reduced operating and technology costs, adherence to compliance standards, streamlined oversight of data governance, security, quality and privacy. For customers, it means a faster and seamless on-boarding experience.
Collaborative technology is the key driver to financial inclusion through the power of world class data.