A Year in Data: KYC, AML, and Onboarding in 2023

November 24, 2023

As a leading provider of Know Your Customer (KYC) and onboarding solutions, Fenergo has conducted a survey of over 1,100 C-suite staff at leading global Financial Institutions (FIs) to discover the biggest trends and challenges they face in 2023 when it comes to this mandatory anti-financial crime process.

The data from this research is unpacked and weighed against KYC data from 2022 in our much-anticipated report, KYC in 2023, which is now available to download.

Analysis of the most recent data in the report reveals a banking industry faced with macroeconomic and operational challenges, both on a regional and global level. FIs are grappling with continued inflation, geopolitical tension, tightening regulations, and the rise of digital-first FinTechs, as well as managing increasing KYC demands with fewer resources and legacy technology. But there are also some encouraging signs of progress with regards to technology adoption and efficiencies gained regionally, perhaps resulting in a general decline we’re seeing in regulatory enforcement action.

Fenergo’s historical research of global enforcement action suggests that financial institutions are getting better at meeting regulatory requirements and avoiding subsequent penalties. Regulators issued just $4.2 billion in enforcement actions during 2022 for non-compliance with a range of regulations, a 22% drop from 2021. Our KYC trends data for 2023 finds that the average number of people carrying out KYC tasks has decreased worldwide - down 14% from 2022- but that globally, the average cost of carrying out a single KYC review has increased by 17% since 2022 to $2,598. We also found that FIs still rely heavily on manual processes, contributing to high onboarding costs, in terms of time, resources, and money.

However, further regulatory changes are coming down the line for FIs as they continue to adapt to reforms like the Anti-Money Laundering Act (AMLA) of 2020, as well as reforms to areas like beneficial ownership reporting, strengthened whistleblower protection and the enhancement of AML/counter funding of terrorism (CFT) frameworks. AML reform is happening worldwide, specifically in the European Union (EU), Canada, and Australia. With these changes come added cost and complexity to the process of acquiring and maintaining customers.

In this report, we explore how financial institutions have adapted their KYC and AML operations in response to the changing regulatory environment looking specifically at: