Maintaining the same business-as-usual environment to comply with KYC requirements is no longer good enough. In response to regulatory requirements and the need to drive operational efficiencies, financial institutions are starting to take a closer, but cautious, look at several new utilities that focus on KYC processes. Let's explore the factors that financial institutions should consider when choosing a KYC utility. Centralising the collection of customer information into a common repository that's accessible to participating financial institutions eliminates duplicative KYC activities across the industry. This can yield significant cost efficiencies, improve customer service, allow for earlier revenue recognition, and increase standardisation of KYC quality and compliance.
Choosing a KYC utility
Many financial institutions see real benefit in engaging with one of the several KYC utilities, regardless of the type. As such, they've started strategic and tactical analysis regarding the use of these services. We’ll explore the numerous factors to consider when choosing a KYC utility.
We recommend that financial institutions consider the following before going into business with a KYC utility:
The regulatory impact
Any legal implications of using a KYC utility
How operations will need to change
The governance and engagement model
The selection of the most appropriate KYC utility or utilities
An agile, cost-effective model
In an environment where financial institutions need an agile, cost-effective KYC service model, KYC utilities provide a viable solution. Using a KYC utility to perform some of the KYC processes enables financial institutions to get back to business, which is about knowing-and thus, being able to sell to-their customers.