Home Slider Facilitating Effective Banking Decisions and Operations with Digital KYC Profiles

Facilitating Effective Banking Decisions and Operations with Digital KYC Profiles

by internationalbanker

By Wayne Johnson, CEO and Co-founder, Encompass Corporation


The financial-services industry is evolving at pace as socioeconomic factors disrupt the market, regulations tighten and technology rapidly advances. As a result, banking leaders must work quickly to keep up with this level of change. Key to this is ensuring they prioritise implementing robust, technology-led know-your-customer (KYC) processes that allow their businesses to meet compliance requirements while operating at maximum efficiency and delivering the customer experience demanded today.

The industry has been in the headlines recently, largely because of the developments in the debanking scandal, which came to the fore when former UKIP (UK Independence Party) politician Nigel Farage claimed his bank account had been closed due to his political views. While the Financial Conduct Authority’s (FCA’s) investigation into the systematic debanking of Politically Exposed Persons (PEPs) found no evidence to support these claims, the widely debated situation has acted as a stark reminder that regulators can come down hard at any point, and banks must be prepared for when they do.

More than ever, it is critical that institutions not only ensure compliance but demonstrate, without any doubt, that their treatment of customers is both fair and consistent—and that is where technology has a vital role to play.

Amid mounting scrutiny, banks must adopt technology-first processes that allow them to act based on verifiable facts presented by live, authoritative data—and be able to prove it. Real-time digital KYC profiles allow banks to validate and verify corporate customers with full transparency to evidence compliance, preserve reputation and operate effectively, benefitting their organisations and customers.

The challenge of remaining compliant in a complex landscape

Banks face the challenge of operating within a stringent and fast-moving regulatory landscape, with the threat of fines and reputational damage never far away if they are found to be non-compliant. At the same time, customer expectations are rising, with a fast and frictionless digital journey routinely expected.

The regulatory requirement to perform KYC is increasingly blocking the true delivery of this kind of experience. KYC is complex, especially when performing the necessary due diligence on companies. Obtaining the level of information needed to fulfil ever-increasing requirements can take a long time, with some businesses reporting waiting as long as 12 weeks to gather the details they need to execute the process.

The power of digital KYC profiles

An over-reliance on manual processes and physical documents means that, traditionally, KYC has been not only time-consuming but inefficient, ineffective and costly, with ramifications across the entire business.

However, this does not have to be the case. Demonstrating the necessary level of compliance while significantly improving customer journeys is now possible. Ready-made digital KYC profiles designed for integration into internal systems are transforming KYC processes today.

These profiles, generated automatically and on-demand from authoritative data sources, are ready to integrate into CLM (client lifecycle management), CRM (customer relationship management) and other applications to provide consistent views of customers. They maximise efficiency in relationship management, significantly improve the customer experience and, ultimately, contribute to a bank’s overall success and future growth.

It is also important to point out that, when relying on manual processes, outreach can be slow and excessive for customers, negatively impacting relationships if they are asked to provide the same information multiple times. Digital KYC profiles draw on extensive readily available data, consequently keeping outreach to a minimum, resulting in slicker journeys overall.

With an automated procedure, banks can be assured of a consistent approach to compliance every time. With real-time, dynamically generated digital KYC profiles, complete with source documents, data-attribute lineages and full audit trails, a bank can operate with full confidence that policies have been followed to the letter and activity is compliant and, crucially, backed up by documents that can be shown to a regulator who comes calling.

Managing and making the most of data

KYC requires vast amounts of data, and effectively managing, monitoring and maintaining this is far from a straightforward task, which can hinder the customer experience. Different source formats and a lack of forward-thinking integration mean data is often fragmented, and gaining that important single customer view is difficult and time-consuming.

Digital KYC profiles provide this view in one place, removing the need for multiple integrations, with maintenance handled by the vendor, thus reducing time and resource burdens on internal teams. This boosts staff output and efficiency and positively impacts their morale and satisfaction, as they can concentrate their efforts and expertise on tasks that really require human intervention.

As well as providing deeper customer insights, having accurate, complete and current data and documents in one place also helps to demonstrate a consistent process and policy adherence each time.

Finding a competitive advantage with technology

Digital KYC profiles help banks achieve and demonstrate compliance, as well as offer first-class experiences to remain competitive in a crowded market. The transparency, consistency and efficiency found by leveraging the latest in technology enable institutions to build trust, enhance their reputations and keep, as well as grow, satisfied customer bases. This is why implementation of these best-in-class solutions should no longer be seen as a nice-to-have but a must to truly unlock potential.

Taking onboarding as an example of the urgency around the issue, put simply, a bank will lose out on customers if it fails to onboard them quickly enough. For this, KYC process automation is imperative—not only providing the journey the customer expects but also facilitating operational gains that can lead to increased revenue for the bank.

Across the industry, the process of verifying and validating corporate customers remains a pain point as institutions strive to find the right balance. If a bank takes on the wrong customer, it opens itself up to the possibility of fines and other actions by regulators, as well as considerable reputational and commercial damage. On the other hand, if it takes weeks to gather the information needed to come to a balanced and fully informed decision on a customer, it runs the risk of losing out on legitimate business, as delays can cause friction and lead to customers seeking alternatives.

The digital KYC profile is a game-changer here, swiftly providing the information banks need to easily and quickly carry out this verification process in a way that keeps the customer happy, building trust and a lasting relationship.

Undeniably, as banks face increasing external pressures and expectations, a technology-first approach is the way forward. Digital KYC profiles offer transformative impacts across all facets of the organisation, from regulatory-compliance assurances that come from being able to make decisions about customers that are grounded in facts to time and operational savings that facilitate positive experiences that increase trust and loyalty and assist in uncovering other business opportunities.

These gains, and more, are vital to banks’ momentum in the long term, with it being crucial that institutions looking to charge ahead in the current—and future—market realise the power that technology, and particularly digital KYC profiles, offer.


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