6 Reasons to Connect to e-KYC Utilities
Over the last three blogs in this series, we’ve analyzed the need for e-KYC utilities to solve the current KYC challenge. We’ve examined the need to learn from previous KYC utility attempts and explored the role of distributed ledger and blockchain technologies to achieve a coveted decentralized approach to KYC utilities. In this final blog, we look at the six main reasons why financial firms are connecting to local e-KYC Utilities and the types of benefits they strive to achieve from this.
There are a wide range of benefits that financial institutions can realize by accessing an e-KYC utility.
Here are six reasons why financial institutions across MENA, Singapore, Canada, Netherlands and the Nordics are engaging with a local e-KYC utility.
1. Greater Regulatory Compliance & Control
Chief Commercial Officers (CCOs) can rest assured that a KYC record is completed to a group policy standard. By harnessing all client data, documentation and compliance outcomes via a single client view, we estimate that financial institutions can expect to re-use three-quarters (75%) of their centralized client and counterparty data across all regulatory frameworks, such as AML/KYC, tax (FATCA, CRS, 871M) and OTC Derivative rules (such as EMIR, Dodd-Frank, MiFID II etc.). Data is, therefore, more up-to-date and accurate.
2. Faster Client Onboarding & Improved Client Experience
With access to the right, up-to-date information, financial institutions can reduce the amount of times they need to ask a client for data or documents. Financial institutions can enjoy faster client onboarding and quicker time to revenues by leveraging existing document and data assets more effectively, both internally and externally. They can drive quality at source and provide a more consistent experience to clients and get them ready to transact, save or trade faster, while offering more value-added services. Capgemini estimates data collection cost reductions could be as much as halved (50%) using KYC utilities.
3. Significant Operational Efficiencies & Cost Savings
e-KYC utilities will reduce costs by enabling banks to standardize and automate technology, processes, data and organizational models. They can also rationalize systems, harmonize organizations, and reduce duplication and inefficient processes.
By using an e-KYC utility, financial institutions can expect to avoid repetitive onboarding processes and reviews, as the work has already been done by other service providers; that data is already stored centrally and securely. This cuts out much of the traditional effort involved – including a large number of touchpoints that happen during the onboarding process, such as client contact and sign-offs. Time to revenue is therefore much faster, overheads are lower, clients are less likely to drop out during the process. It’s a win-win!
With a trusted single source, financial institutions could potentially save many hours in the back office and eliminate much of the subscription services that they already have.
4. Reduced Operational Risk
Eliminating risk of manual error from keying and re-keying the same information from multiple systems across each financial institution or business line.
5. Commercial & Digital Transformation
Financial institutions can gain better insights into what KYC and client data is telling the bank about their client and create transparent partnerships across business divisions to share data and realize wider opportunities. Financial institutions can also share this information with wider services, utilities and government agencies within regions, countries, jurisdictions or a trusted business network.
6. Increased Competitiveness
At Fenergo, we believe that solving regulation delivers little or no competitive advantage. That’s why all of our clients collaborate as a community to solve global regulation together. However, by digitalizing the processes underpinning KYC and other regulatory compliance obligations, and further automating through subscription to an e-KYC utility, financial institutions can create smoother processes that result in reduced costs and swifter client onboarding – the real differentiator!
If you are interested in more detail on e-KYC Utilities please download our whitepaper or email us at email@example.com for more information.