The reason why onboarding has so many rules and regulations, is because without strict know your customer (KYC) and customer due diligence (CDD) checks, financial criminals can operate with impunity. Which is exactly what they did before regulators stepped up the rules.

The onboarding of customers can be a frustrating experience for everyone involved.

Ever-increasing regulatory requirements have gradually turned this formal customer introduction process into a major challenge.

Since their introduction 50 years ago, the total number of laws and regulations has grown exponentially, continually raising the regulatory bar and consequently making the customer onboarding process increasingly difficult to manage.

Fast forward to today, and it has become a multifaceted process littered with friction points that can easily sour a burgeoning relationship. In fact, it is not unknown for customers to walk away and join a competitor simply because of the length of time it has taken to onboard.

The problem is greatly exacerbated for financial services institutions which must conform to even more stringent regulations and a myriad of checks, many of which are legally binding.

Yet the customer onboarding process is the very first step toward a successful business relationship, making it by far the most important stage of the customer lifecycle.

The instant a prospect makes the decision to become a fully-fledged customer, a fast, seamless onboarding process is crucial to ensure the relationship starts off on the right foot.

Compliance teams have spoken out about the onboarding challenges they face

Earlier this year, we reached out to compliance professionals with a survey to help us to understand their current challenges, priorities, and processes when onboarding customers and suppliers.

As the chart above shows, nearly two-thirds of respondents stated that one of their key priorities for improving their KYC onboarding process was to reduce risk to their business.

So, it came as no surprise that almost half stated that in order to reduce risk their goal was to simplify the process, citing challenges such document gathering, identifying ultimate beneficial owners (UBOs), and the overall time to onboard customers.

This was underlined by the fact that over half of respondents are currently using 2-3 tools to onboard customers, with close to two-thirds stating a preference for a single combined journey for all parties when onboarding a corporate entity.

These are just a few of the findings that the survey uncovered (click here for the full report). Together they combine to highlight that some of the key problems faced by compliance professionals across the world relate to a desire to simplify and streamline the onboarding process.

The argument for automation

The rise of challenger banks and increased competition between mainstream players has greatly increased the fight to attract customers. As a result, it has never been so crucial to onboard customers quickly, easily, and seamlessly.

Even so, many businesses are still mired in outdated onboarding processes that are cumbersome, time-consuming, and often not up to the task.

If businesses are to overcome the obstacles that stand between them and the successful onboarding of a customer, a radical improvement of the whole process is needed.

Automation enables businesses to achieve both compliance and customer service objectives in one fell swoop.

The right solution, correctly implemented, delivers a wide range of benefits, most notably:

  1. Better compliance. Mandated obligations covering KYC and CDD require extensive verification against official lists and databases. Automation offers greater speed and efficiency, while also increasing the quantity of data that can be safely processed.
  2. Accuracy and flexibility. Improved procedural accuracy and reduced potential for human error. In addition, onboarding software can be calibrated to suit different regulatory environments and then adjusted quickly should the situation change.
  3. Simplicity. By simplifying the administrative process, an automated solution smooths the path to onboarding, making it easier for both compliance teams and the customer. Often, customers can access onboarding services directly via an online portal, which empowers them and frees up personnel to concentrate on other work.
  4. Maintain auditable records. Customer data can be safely stored and easily accessed whenever required. This is especially important should financial authorities undertake an investigation or when submitting a suspicious activity report (SAR).
  5. Share information across the business. By delivering a consolidated approach to data storage, it provides all authorised stakeholders with access to a central repository of information. This enables the sharing of information while preventing the creation of data silos.
  6. Scalability and future proofing. Most software solutions can be scaled to match any future growth and offer the flexibility to keep pace with changes to the regulatory landscape.

 

Caveat emptor. With any automated solution, you need to show regulators that you have partnered with a leading provider that truly understands and delivers a risk-based approach at every stage. Failure to do so could result in a costly and ultimately pointless exercise.

The problem may be challenging, but the solution is simple

RiskScreen OnBoard overcomes the challenges by offering a single, end-to-end solution that covers every aspect of the onboarding process.

It delivers simplicity, consistency and speed, thereby empowering you to onboard more clients faster than ever before.

This intelligent and intuitive solution is configurable to your unique business requirements, enabling you to take a tailored risk-based approach to onboarding.

As a result, it provides end-to-end consistency to the onboarding experience for all parties involved with real-time verification, through the following key elements:

  • A streamlined process for acquisition of customer details and electronic identity verification (eIDV)
  • Initial and ongoing risk screening for both KYC and KYB
  • Ensure the security of all information through encrypted data transmission and storage
  • Variable user profiles enable secure access across multiple offices and remote workers
  • Full, auditable reporting to demonstrate compliance to regulatory bodies

 

As well as the above, RiskScreen OnBoard offers a range of additional functionality, all designed to make the onboarding of customers even more comprehensive.

It offers two distinct risk models. A single highest value for quick provisional assessment and a weighted total risk for a more detailed risk assessment.

For KYC, KYB, eIDV, and Screening, you can choose the level of intensity of data inputs based on the risk-based approach.

There is also the new Dynamic Forms module which reacts to the answers and live risk assessment that are being conducted ‘on the fly’. Should a prospect reach a pre-agreed threshold, then a high risk on-boarding flow can be triggered without them being aware.

A flexible approval and sign off process offers you the ability to tailor signoffs from straight through to eight eyes, depending on your risk appetite.

All this is delivered in a single package, with a single contract, and through a single supplier.

For a no-obligation demonstration of how RiskScreen can help your business overcome the complexities of onboarding, contact us today.

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