Sibos 2024 - Meet the Experts: Customer Experience vs KYC Compliance in Onboarding

“The industry is struggling to balance providing adequate protection to the bank, the industry and society while at the same time remaining efficient and customer friendly. It is critical we get that balance right,” said Carlos Infesta Fernandez, Global Head of Regulatory Affairs & Compliance at Santander.  

Carlos joined Fenergo’s CEO, Marc Murphy on a panel session (watch the recording above) entitled Customer Experience vs KYC Compliance in Onboarding – Can AI Restore Order at Sibos 2024. Managing the juxtaposition between reducing risk through know your customer (KYC) compliance and keeping clients happy is nothing new but the advent of AI and its ability to completely transform how organizations manage clients, address risk and realize value is novel.  

Hailed by some as a panacea, the next industrial revolution, AI has the power to remove bottlenecks in productivity while unlocking potential for speed of services and growth. 

Regulation as an Enabler  

As the doors opened at Sibos 2024 in Beijing, delegates from financial services organizations around the world convened to debate the theme; Connecting the Future of Finance. In a thought-provoking industry session entitled Building the Bank of Tomorrow, panelist Ashish Bajaj from Citi commented that to build a successful bank of tomorrow, “you need to get risk management right.”  

Ashish also commented that regulation should be treated as an enabler and not an impediment to success, urging the industry to band together to enable regulation to work in a safe, reliable and resilient way. Erica Kostelijk, ABN AMRO, also on the panel, responded to the same question by wishing for an “easily, interconnected ecosystem that eliminates complexity.”  

Complexity and Silos are Crushing CX 

A common theme that emerged from both sessions is complexity. This coupled with a lack of interoperability between internal processes is crushing the client experience and growth as a result. 

In a live poll at Fenergo’s panel at Sibos, we asked audience members what the primary inhibitors to a seamless client experience are in their organizations. The majority (57%) selected ‘disconnected data/systems’. Not one said their clients were satisfied with the client experience.  

The requirements for additional data and documentation for client onboarding and regulatory compliance have exploded because of significant regulatory change.  

In Fenergo’s 2024 survey of global corporate, investment and commercial banks, 67% admit to losing clients due to slow and inefficient onboarding and 87% attribute this to poor data management and siloed processes. In Stella Clarke’s session (Fenergo’s Chief Strategy and Marketing Officer) on the Exhibitors Stage at Sibos, audience members gasped when she revealed the true cost of static KYC and fractious onboarding - from $175m per commercial bank per year. 

AI-powered Success  

AI, incorporated into technology for KYC, onboarding and client lifecycle management (CLM) has the power to radically change this. With AI-powered CLM and KYC, firms can automate labor-intensive tasks, fast-tracking the collection, analysis and management of data and documentation while reducing friction in the client onboarding experience.  

This will allow firms to adopt a risk-based approach to compliance, straight through processing the 99% of medium-to low-risk clients while focusing human effort on the 1% of high-risk clients. 

Looking back to comments from Citi’s Ashish Bajaj about viewing regulation as an enabler, the successful banks of tomorrow will be those that have done just that. Instead of boxing off regulation as an impediment, there is the opportunity to modernize legacy systems, replacing manual with automation and making it faster, simpler to onboard and do business with clients. With AI in the mix, this can be achieved much faster. 

For more on Fenergo’s research into global banking trends download the 2024 report here.