Taking Your Compliance Program to the Next Level with ...€¦ · Diligence (CDD), and Anti-Money...

Results from 2018 Financial Services Industry Survey 1

Taking Your Compliance Program to the Next Level with Intelligent AutomationResults from the 2018 Financial Services Industry Survey

ACKNOWLEDGMENTSThe authors would like to thank Kofax, Mainstay Company and Bonova Advisory for their contributions

Copyright © 2018 Digital Banking Trends. All rights reserved

2 Results from 2018 Financial Services Industry Survey

TABLE OF CONTENTS

Executive Summary ��3

All Aboard: Why Customer Onboarding Matters ��4

The Changing Compliance Climate ��5

The High Cost of Non-Compliance ��6

Throwing People at the Problem ��7

Compliance Bottlenecks ��8

Surging Compliance Costs ��9

Budget Winners & the Tradeoff ��10

From Vision to Reality ��11

Harnessing the Power of Data ��12

Where Banks Get Their Data ��13

The Power of Regtech ��14

Transforming Through Automation ��15

Automation in Action ��16

Top 10 Tips For Building an RPA Center of Excellence ��17

Learn More ��18

Appendix ��19


EXECUTIVE SUMMARY –NAVIGATING THE NEW COMPLIANCE LANDSCAPE

Compliance has never been more critical to the growth and profitability of financial services institutions than it is today. The need is real: Unwittingly or not, financial firms are too often the enablers of criminal activities ranging from money laundering and fraud to corruption and terrorism.

But the burden of compliance adds costs and complexity to operations. Even worse, the extensive data collection and verifications needed to perform the necessary “due diligence” can turn off customers accustomed to real-time, mobile-enabled services.

As decision-makers grapple with having “too many regulators to manage,” they must adopt new approaches and invest in tools and strategies that can help them efficiently navigate the new complexity.

To gauge how leading financial institutions are navigating the new compliance landscape, we asked more than 100 industry leaders to contribute their views on issues ranging from the costs of non-compliance to investments in new technologies to automate key compliance activities.

The 2018 Survey: Taking the Pulse of Financial Services Leaders

• Encompasses more than 100 financial institutions around the world.

• Designed to assess the real impact of global changes in Know Your Customer (KYC), Customer Due Diligence (CDD), and Anti-Money Laundering (AML) regulations.

• A range of primary job function of responsibility of participants including operations, compliance, risk management, audit and IT.

• The respondents primary region of responsibility include 12% Global, 64% North America, 4% APAC and 19% EMEA.

• More than 50% of participant institutions have asset size of more than $50 billion, 8% between $10 billion to $50 billion, 15% $1 billion to $10 billion and 27% below $1 billion.

• Most participants came from financial institutions that operate in more than one jurisdiction, offering insights into cross-border challenges.


ALL ABOARD: WHY CUSTOMER ONBOARDING MATTERS

2 Thompson Reuters 2016 Know Your Customer Survey

As banks increase their scrutiny of customers to combat money laundering and comply with new regulations, they’re also taking longer to bring customers onboard. That’s not a tradeoff most banks should be happy with.

One study showed that banks contacted clients an average of four times during the onboarding process, and corporate clients reported an average of eight contacts across a higher number of different bank departments.2

Adding to the frustration are time-intensive manual processes that have become more cumbersome as compliance requirements have increased. Waiting longer can try a new customer’s patience — and more than a few customers may decide to walk away.

Today, customers are demanding an anytime/anywhere onboarding experience, particularly in the areas of mobile and other self-service options. Forward-thinking banks are empowering customers through mobile ID verification and authentication capabilities.

Onboarding times remain lengthy, with banks reporting longer average times (30 days) than investment managers (23 days). The global average across both is 26 days, up from an average of 24 days reported a year ago.

The Waiting Game

Banks contacted clients an average of four times during the onboarding process - often different personnel from different departments.

The Telephone Game

Source: Thompson Reuters 2016 Know Your Customer Survey

“ Your onboarding process needs to be as fast, seamless and painless as possible. Customers who feel your initial onboarding and activation is too difficult or time-consuming are likely to walk away.”

— Jim Marous, Owner and Publisher, Digital Banking Report

Source: https://blogs.thomsonreuters.com/financial-risk/know-your-

customer/kyc-onboarding-still-a-pain-point-for-financial-institutions/

https://blogs.thomsonreuters.com/financial-risk/know-your-customer/kyc-onboarding-still-a-pain-point-for-financial-institutions/

https://blogs.thomsonreuters.com/financial-risk/know-your-customer/kyc-onboarding-still-a-pain-point-for-financial-institutions/


THE CHANGING COMPLIANCE CLIMATE

It seems that every day a new financial crime makes the news. Another money laundering scheme tarnishes a bank’s reputation. New fraud and corruption allegations hit the headlines. Multi-million-dollar fines are assessed. According to a survey by PwC, 46% of financial services institutions have suffered economic crime in the last 24 months, and 35% said crime had a high or medium impact on relationships with regulators.1

It’s no wonder that regulators have been getting tougher on financial institutions – not only in the U.S through agencies such as the Financial Crimes Enforcement Network (FinCEN) but also globally though organizations such as the intergovernmental Financial Action Task Force (FATF).

Today, banks and other financial institutions must comply with a growing set of regulations that require comprehensive data collection and verification

activities – starting when a customer applies for a new account and sometimes continuing for years. These include activities related to:

• Customer Due Diligence (CDD): Information gathering to assess the extent to which the customer exposes a financial institution to a range of risks, such as money laundering and terrorist financing. Institutions may also conduct enhanced due diligence (EDD) for higher-risk customers.

• Know Your Customer (KYC): The process of identifying and verifying the identity of potential and existing account holders.

• Anti-Money Laundering (AML): A set of procedures, laws and regulations designed to stop the practice of generating income through illegal actions.

1 https://www.pwc.com/gx/en/assets/gecs/gecs-fs-industry-cut-2016.pdf

https://www.pwc.com/gx/en/assets/gecs/gecs-fs-industry-cut-2016.pdf


THE HIGH COST OF NON-COMPLIANCE New Rule: FinCEN

requires identification of ‘beneficial owners’

In 2016, FinCEN—the U.S. Treasury Department’s lead agency for combating money laundering—released its Final Customer Due Diligence Rule that requires certain financial institutions to “look through” account holders to identify the account’s “beneficial owners” who ultimately own or control the entity. The rule also establishes a “fifth pillar” in FinCEN’s AML program, requiring certain institutions to implement risk-based procedures for conducting customer due diligence (CDD) on all customers. Compliance with the CDD Rule becomes mandatory on May 11, 2018.


THROWING PEOPLE AT THE PROBLEM

In the rush to comply, banks are hiring people in record numbers. It’s estimated that at least half of all financial institutions have added staff to keep up with KYC compliance, with most banks now employing hundreds to thousands of compliance professionals.

Here’s what some of the top financial services companies are doing to keep up:

All information taken from online public sources

Citi has 26,000 compliance employees at average salary of £46,000 (totaling £1.2B per year in salary)

JPMorgan added 4,000 compliance staff

BNP Paribas has increased compliance staff by 40% to 1,600 with plans to increase audit and risk management staff

HSBC hired 3,000 more compliance officers

Results from 2018 Financial Services Industry Survey 8

COMPLIANCE BOTTLENECKS

What’s the hardest part about meeting new CDD and KYC requirements?

In our 2018 survey of top financial services firms, several bottlenecks stood out. Companies said they were most challenged by maintaining and updating their existing IT infrastructure to manage the new compliance environment. Banks also said they had difficulty gaining access to the high-quality data needed to comply with new customer-due-diligence and know-your-customer mandates.

“Survey Says”

Very Challenging

Somewhat Challenging

Difficult to maintain / update existing IT infrastructure

46% 50%

Data availability / quality

41% 50%

Lack of clarity from regulators

27% 46%

Reliance on manual processes

23% 55%

New risk scenarios 18% 73%

What’s toughest about CDD/KYC compliance?


SURGING COMPLIANCE COSTS

Sticker Shock

32% of respondents said they expect a 20-29% increase in AML compliance costs in 2018. Only 5% expect a decrease.

In today’s challenging compliance environment, costs are escalating. For example, financial institutions with $10 billion or more in revenue saw their average spend on KYC-related procedures increase to $150 million in 2017, up from $142 million in 2016.3

Among the financial services companies in our survey, nearly a third said they expected costs for their CDD, KYC and AML programs to rise 20% to 29% this year.

“Survey Says”

0–9% Increase

10–19% Increase

20–29% Increase

30–39% Increase

No Change

20–29% Decrease

Source: Business Times

41%

14%

32%

4%4% 5%


BUDGET WINNERS

Financial institutions are spending more overall on CDD, KYC and AML programs. But which operational areas are they targeting for more budget? Financial firms in our survey said they expect the biggest funding increases to go into technology, followed by audits and compliance management. From a business-process perspective, respondents said they expect to invest more in customer screening than other areas.

THE TRADEOFF

There’s a tradeoff to adding more people to handle more manual tasks: It increases the likelihood of all-too-human errors.

Manual inaccuracies can increase the risk of noncompliance, which can lead to fines as well as delays in the onboarding process. Slow service can also turn off customers, hurting revenue and slowing growth.

Another tradeoff when you shift labor resources to compliance: Customer education often suffers. In our survey, 64% of respondents reported no change in spending on education, and 14% are decreasing spend.

“Survey Says”

3.Onboarding

2.Transaction monitoring

1.Customer screening

Top Spending Categories (KYC and AML) in 2018

Percent increase in AML compliance budget by area in the next 12-18 months

77%Technology:

internal costs

50%Audit

46%Compliance

management


FROM VISION TO REALITY

Innovation Challenges

“In what parts of your organization’s innovation process do you see the most challenges?”

“Survey Says”

Balancing compliance requirements with a great customer experience is no simple task. That’s where technology and innovation can make a big difference, empowering firms to improve compliance performance while making customer onboarding and other interactions a faster and more convenient experience.

But many financial firms are stymied by the time and costs involved in turning innovative concepts into reality. What’s more, the inertia of existing IT environments can be an impediment to implementing needed technology and process innovations.

Time/cost required from concept to reality

Budget constraints

Legacy technology landscape

Evaluating/prioritizing new ideas

91%86%

82%77%


HARNESSING THE POWER OF DATA

Shifting Priorities

“What are your institution’s highest operational priorities for the next 12-18 months related to your CDD/KYC program?”

Information about your banking customers exists everywhere – and that’s the problem. How do you know if you’re collecting a complete and accurate set of data? How do you compile and keep track of it all? And how do you know when to act on it?

According to Business Times, documenting and maintaining current KYC records “remains difficult for financial firms, with just 18% of the banks surveyed taking action only when an event triggers a KYC review.”

The financial firms in our survey agree — and they are taking action. The vast majority said they are shifting their operational focus — first and foremost — to improving data quality and management.

“Survey Says”

1. Improve data management / data quality

2. Invest in new technology solutions / process automation

Highest Priorities Medium Priorities

46%

46%

46%

46%

59%

41%

3. Real-time risk assessment at onboarding

4. Streamlining end-to-end process

41%

50%


WHERE BANKS GET THEIR DATAFinancial firms need to cast a wide net to gather all the data required to meet their customer due diligence responsibilities. For firms lacking automation tools, this can be a time-consuming and error-prone process.

Multiple Sources

“How many third-party data sources do you use for AML/KYC checks?”

68% of financial services firms get their AML/KYC data from up to five third-party sources.

Top Sources of AML/KYC Data

Percent of firms using various third-party providers:

68% internal sources

55% Lexis Nexis

41% Thomson Reuters and individual website

27% Google and NICE Actimize

“Survey Says”

68%Up to 5 Sources

23%6 to 10 Sources

5%


THE POWER OF REGTECH

Regtech on a Roll

“Expected increase in KYC/AML/CDD technology spending in next 12-18 months:”

36% anticipate an increase of up to 10%27% anticipate an increase from 26% to 50%

More and more financial companies are leveraging new regulatory technologies – or regtech — to tame the torrent of data and rein in compliance costs. Regtech solutions include everything from robotic process automation (RPA) to artificial intelligence (AI).

The potential for savings is massive. Just imagine: With the typical multinational financial institution having as many as 30,000 compliance staff, just three bank compliance departments could fill London’s Wembley Stadium.

That means that a single large bank could save $1.2 billion per year by reducing staff by half, according to one study.3 The study also found that AI automation of KYC checks could reduce time required by 90%, generating time savings of 5.4 million hours annually by 2022.

It’s no surprise that regtech spending, as a percentage of regulatory spending, is expected to

increase dramatically, from 4.8% in 2017 to 34.4% by 2022.

Participants in our survey confirm the trend, with many anticipating across-the-board boosts in tech spending.

“Survey Says”

3 Regtech Strategies for Financial Services 2017-2022 by Juniper Research

https://www.juniperresearch.com/researchstore/fintech-payments/regtech


TRANSFORMING THROUGH AUTOMATION

Robotic process automation is one of the most promising new technologies for accelerating data-intensive compliance processes, saving staff time, and improving the customer onboarding experience. Using RPA, financial institutions can:

• Use software to mimic specific actions a person would take while working on a computer

• Search dozens of internal and external systems by keywords, copying and pasting search results into a standardized report within minutes.

• Automatically route approvals in low-risk cases

• Prioritize cases that need more thorough validation and research to correctly assess the risk of the application

• Integrate the solution with existing technology

In our survey, financial firms said they expected double-digit increases in the use of RPA across numerous compliance functions, from document gathering (+41%) to customer off-boarding (+32%).

“Survey Says”

Are you using RPA for any of the following?

Plan to use RPA Currently using RPA

Risk Assessments27%

5%

Compiling Customer Information36%

14%

Document Gathering41%

14%Data Aggregation

32%5%

Offboarding32%

5%Documentation of Evidence

36%5%


AUTOMATION IN ACTION

RPA proving its transformational value at Deutsche Bank

CHALLENGE High volumes of manual, repetitive transactions were taking a toll on workforce productivity.

SOLUTION The bank implemented robotic process automation combined with cognitive capabilities to increase efficiency and effectiveness of back- and mid-office processes.

RESULTS

• Achieved 30-70 percent automation in functions where RPA is deployed

• Decreased time to train employees

• Augmented workforce with encoded intelligence

• Increased employee satisfaction by reducing monotonous task

European bank saves thousands of person-hours a week on KYC checks

RESULTS

• CDD investigation: From 15 minutes to 90 seconds

• Corporate investigations: From 10 minutes to 70 seconds

• AML investigations: From 20 minutes to 2.5 minutes

• Analyst hours saved: Thousands per week

CHALLENGE With tougher regulations demanding more know-your-customer checks, the bank needed to scale its limited resources. Automation could free up employees for more productive work and improving overall performance

SOLUTION The bank deployed Kofax Kapow™ and Kofax TotalAgility® platform to automate manual tasks and achieve digital transformation.

Bank of Tokyo-Mitsubishi UFJ automates 2,000 manual processes

CHALLENGE Thousands of manual processes were taking up valuable employee bandwidth and compromising overall performance.

SOLUTION The bank deployed Kofax Kapow™ and Kofax TotalAgility® platform to automate manual tasks and achieve digital transformation.

RESULTS

• Kofax’s RPA platform mimics human actions to automate a wide range of manual, repetitive tasks and drive continuous improvements.

• Japanese language support allows robot designers, administrators, and business users to work in their native Japanese language

• No complex coding or lengthy development cycles are needed, speeding project deployments and increasing ROI.


TOP 10 TIPS FOR BUILDING AN RPA CENTER OF EXCELLENCE

RPA can help a financial institution realize its full potential and maximize its resources for peak operating performance. A Center Of Excellence (COE) develops the blueprint for the RPA strategy with deliverables, KPIs, and contingency plans for needed adjustments along the way.

1. Perform Testing and Initial Assessment. Research the benefits and costs of RPA as it applies to your business, such as improvements in operational efficiencies and fewer errors from manual entries.

2. Seek External Assistance. Expect to bring in outside subject matter experts to provide a thorough assessment of how the technology could be implemented, the savings realized, and the costs you’re likely to incur.

3. Establish an Advisory Council. Your council should include IT professionals and department experts as well as those who can view the process from a holistic level to determine how the RPA strategy impacts every division involved.

4. Blueprint Your RPA Capacity Plan. Outline the RPA integration strategy, including the divisions involved in the rollout and how the process will unfold, such as needed investments in technology, staff, and training.

5. Create Scalable Technology. Establish the robotic automation configuration needed to

complete the project and ensure your institution has the resources available to scale the automation process properly.

6. Conduct a Pilot. Test your RPA solution in one division or line of business and provide detailed reporting of the successes and obstacles encountered. Establish best practices and lessons learned before rolling out the automation plan enterprise-wide.

7. Scale Your RPA Strategy. Leveraging the pilot results, your COE can help scale your automation strategy while monitoring ongoing progress.

8. Maintain Governance. Your COE should ensure continued use of best practices and any necessary strategy adjustments. Progress reports via a management dashboard can track how each division is performing.

9. Communicate! Implementing and managing change can be difficult. Be sure to create communication channels to keep everyone on the same page. For example, sharing success stories is one way to promote continued adoption of RPA.

10. Be Adaptable. Make sure your COE strategy stays fluid and ready to integrate new technologies and trends.

Authored by Breana Patel, CEO, Bonova Advisory

Get the full “10 Tips” report from Bonova Advisory.

http://www.digitalbankingtrends.com/compliance/183-top-10-tips-for-building-an-rpa-center-of-excellence.html


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Infographic: The Top 5 Reasons You Need Robotic Process Automation for KYC

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Solution Overview: Know Your Customer Automation

White Paper: Anti-Money Laundering (AML)—The Compliance Acronym That Could Really Cost You

The ABC’s of Automating CDD, KYC and AML: How to Bridge the Compliance Gap with Robotic Process Automation

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https://www.kofax.com/-/media/Files/Infographics/EN/ig_top-5-reasons-you-need-RPA-for-KYC_en.pdf

https://www.kofax.com/-/media/Files/Infographics/EN/ig_top-5-reasons-you-need-RPA-for-KYC_en.pdf

https://www.kofax.com/Learn/eBooks/eb_how-financial-institutions-are-improving-operations-with-RPA_en



https://www.kofax.com/-/media/Files/Solution-Overview/EN/so_know-your-customer_en

https://www.kofax.com/-/media/Files/Solution-Overview/EN/so_know-your-customer_en

https://www.kofax.com/Learn/White-Papers/wp_anti-money-laundering_en



https://www.kofax.com/-/media/Files/E-books/EN/eb_ABCs-of-Automating-CDD-AML-KYC-with-RPA_en.pdf




APPENDIX


REDUCE YOUR RISK AND INCREASE YOUR REWARD: IMPROVING COMPLIANCE AND CUSTOMER ENGAGEMENT THROUGH AUTOMATION

requirements, such as the EU’s revamped version of the Markets in Financial Instruments Directive (MIFID II) and its General Data Protection Regulation (GDPR), are adding further burdens on many financial institutions.

On the customer side, demands for an anytime/anywhere onboarding experience continue to intensify, particularly in the areas of mobile and other self-service options. Also intensifying is customer frustration due to still-prevalent manual processes that have become more cumbersome as compliance requirements have increased. Consider that the average time to onboard a new financial customer is expected to increase from 28 days to 32 days this year.1 Compliance bottlenecks are a major contributing factor for these timelines.

And it’s not just the length of time it can take to open an account—it’s also the hassle. In one Thomson Reuters

As regulatory compliance requirements and demands for an engaging customer experience continue to converge, a central question emerges: Can you turn your compliance challenge into a customer engagement opportunity?

Many financial institutions have learned the hard way that the way compliance processes are implemented and managed within an organization can have far-reaching consequences above and beyond the hefty fines, including client retention, labor costs and, ultimately, revenue and profit margins for the long term. The strength of a compliance workflow is only growing in importance as the laundry list of compliance acronyms continues to grow. KYC (Know Your Customer), Bank Secrecy Act/Anti-Money Laundering (BSA/AML) and Customer Due Diligence (CDD) are a few that that dominate the news cycle. However, newer


study,2 banks contacted their clients an average of four times during the onboarding process (often different personnel from different departments), and corporate clients reported an average of eight contacts across a higher number of different bank departments. This suggests that an uncoordinated and inefficient process is likely leading financial institutions to unwittingly duplicate information requests. Clearly, this can damage your customers’ confidence in your bank’s ability to balance protecting the accuracy and security of their information with a user-friendly experience.

Many banks find themselves stranded at this intersection of compliance and the customer experience, unsure of which way to move forward and where to focus their often-limited resources.

Do you dot all the ‘i’s and cross all the ‘t’s to remain compliant, which adds complexity when tackled traditionally? Or do you prioritize a fast, frictionless onboarding experience, since customers and complexity don’t mix?

The Road to Noncompliance is Paved with Good Intentions Most financial institutions have good intentions when it comes to compliance; however, the road to noncompliance is paved with good intentions. The strength and flexibility of a compliance system is critical because, as with most things, not all compliance systems are created equal. A piecemeal or reactive approach can waste a great deal of money and time without doing much to mitigate compliance risk and, in some cases, can make the situation worse.

One common, yet routinely ineffective, approach is investing in new infrastructure in an attempt to

automate. But often, these systems are poorly integrated, with mountains of data housed in systems that don’t (or can’t) communicate. This mix-and-match approach often pushes the limits of legacy non-digital processes and systems that were simply not built to adapt or evolve. And your compliance unit is at the mercy of IT when—not if—an integration fails.

Adding headcount is the most prevalent approach, and financial firms can spend tens of millions of dollars every year on compliance by throwing people at the problem. In one study, half of financial institutions have added employees to keep up with KYC compliance, and an average of 68 employees are working on KYC adherence and processing within a financial institution.3 To meet CDD requirements, one bank employed 30k compliance staff at a whopping cost of £1.2b per year.4

However, adding more humans to handle more manual tasks invariably increases the likelihood of errors (not to mention labor costs and the difficulty in finding qualified compliance workers), creating a snowball effect. These manual inaccuracies lead to risk of noncompliance, which can lead to hefty fines and delays in the onboarding process. Delays can alienate customers, damage a firm’s reputation and result in slowed revenue realization or even loss of business.

Customers and Complexity Don’t Mix The good news is that banks don’t have to choose between maintaining compliance and delivering an engaging customer experience. There are clear steps your bank can take to streamline and enhance your compliance processes, while simultaneously providing smooth, seamless onboarding.

1 Thompson Reuters 2017 Global KYC Surveys Attest to Even Greater

Compliance Pain Points2 Thompson Reuters 2016 Know Your Customer Survey

3 Thomson Reuters, 2016 Know Your Customer Survey4 MarketWatch

http://thomsonreuters.com/en/press-releases/2016/may/thomson-reuters-2016-know-your-customer-surveys.html


Above all, your bank needs the flexibility to adapt and respond quickly to change—whether that’s changing compliance regulations or changing customer expectations. This is where a digital transformation platform with a comprehensive range of capabilities for end-to-end-digitization can deliver enormous benefit.

A Bridge Between New and Existing InfrastructureAccording to a recent survey, a mere 21% of banks think their current technology is flexible enough to handle always-changing compliance requirements rapidly.5

This is an alarming statistic since embracing a dynamic, flexible response model is critical for bridging new and legacy infrastructure. A static model and “set and forget” mentality will invariably fail and make a bank vulnerable, particularly to increasingly sophisticated and dedicated criminal enterprises.

A better path is to empower your bank to meet compliance regulations via an open, adaptable architecture that lets your bank transition to digital via a self-paced adoption path. By choosing a modular software platform that enables you to add functionality on your timeline to meet your business priorities, you have an abundance of choice—whether that means starting with mobile onboarding capabilities or streamlining data-gathering through automation, or going all in and digitizing the end-to-end customer journey.

It’s crucial to consider how well a compliance solution or tool will work with your current central and peripheral systems; an open technical architecture will enable you to integrate legacy systems of record and third-party components easily. Many vendors create a

new island of technology rather than support a smooth digital transformation. While it’s important to deploy a digital platform that consistently applies business rules and enforces compliant processes, you also need the ability to adapt quickly as policy and regulation requirements change.

Multichannel Capture and ID VerificationThe best way to engage your customers is to empower them to interact with your bank on their terms—whether that’s in the branch, on a laptop or on their mobile phone. The key is to speed information intake through powerful omnichannel document and information capture and data integration capabilities. By extracting information from captured documents (structured, semi structured and/or unstructured), you have eliminated the process of re-keying information. When human errors are reduced, so are the compliance risks to your business.

For example, if your customers use a mobile app to apply for a loan with your bank, they could start by scanning their ID with a mobile device to jumpstart the process. Mobile ID capture technology can prefill the form, ID verification technology can determine if the ID is real and unaltered, and facial recognition software can ensure the applicant in possession of the ID is the actual owner. These three levels of ID checks help ensure the integrity of your processes and improve compliance. If additional documents are required (such as proof of residence, tax documents, etc.), your customer can also submit those digitally—no manual data entry required. Once the information is submitted, the bank’s digital platform takes over by using the data provided to perform a variety of checks against external data sources.

5 Why KYC Regulations, Client Onboarding and Digital Transformation are Driving Banks to Invest in Technology, International Banker

https://internationalbanker.com/technology/kyc-regulations-client-onboarding-digital-transformation-driving-banks-invest-technology/


After approval, the customer can sign digitally on a mobile device or on a tablet to complete the process. Ensure you can capture and verify e-signature, biometric, click-to-sign, photo or handwritten signatures for maximum customer flexibility and business compliance—e-Signature delivers strong evidential weight to reduce or remove need for wet signing.

Software Robots— No Breaks and No MistakesRobotic process automation (RPA) is an ideal tool for doing the legwork on compliance checks. Software robots mimic the actions your employees take while performing repetitive compliance tasks, eliminating time-consuming, error-prone manual data entry. In essence, this digital workforce functions as data-gathering experts, delivering comprehensive data to your compliance officers to streamline compliance operations.

RPA intelligently and, in real time, searches and retrieves customer information from websites, portals and other hard-to-reach data sources outside your bank sites (such as the U.S. Treasury, Immigration and Customs Enforcement, the FBI, law enforcement agencies and credit bureaus). RPA queries all of these sources simultaneously, improving the quality of data and reducing the time to accurately verify that a customer is who they say they are. Because RPA sits on top of (rather than replacing) your existing technology, it is both complementary to core systems and non-disruptive for day-to-day business.

According to the Institute of Robotic Process Automation, out of every 100 steps, a human is likely to make 10 errors, even when carrying out somewhat redundant work. As a robot never makes a mistake, RPA significantly improves your data quality, eliminating costly errors to deliver 100 percent accurate

information. And robots can perform customer due diligence around the clock 24/7/365, decreasing processing times 35-50 percent.6

RPA also provides value beyond the initial compliance checks; it is designed to help your bank respond faster to regulatory updates by automatically monitoring and extracting external data from regulatory sites, as well as performing due diligence checks on your customers’ information on a periodic basis to ensure their data is maintained, current and valid. The software also provides detailed audit trails, so your compliance and risk management teams can rest easy.

To understand the performance of your processes and your teams, you must be able to easily access relevant information so you can quickly discover any critical issues that, left unchecked, could lead to operational problems, missed opportunities or worse—deficits that could result in compliance violations.

Clear, end-to-end business analytics can deliver unique visibility into your business processes. Monitor adherence to service level agreements (SLAs) or other performance obligations, and make insightful comparisons to historical performance through built-in analytics dashboards. By linking data and metrics to specific steps in business processes, you can gain the insight necessary to understand how processes and the operations they represent are working. This can help to uncover bottlenecks and process exceptions that could be putting your bank’s regulatory compliance at risk—before you find your bank charged with costly and embarrassing violations.

6 Benefits of Robotic Process Automation, Virttia

Discover the 6 essential pieces of a smart, automated KYC/AML/CDD compliance workflow. Download KYC Sparks an Automation Revolution with RPA today.

https://www.kofax.com/Learn/White-Papers/wp_kyc-sparks-an-automation-revolution_en

Taking Your Compliance Program to the Next Level with ...€¦ · Diligence (CDD), and Anti-Money...

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