# Know Your Customer – let’s make this easy Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-01-20 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: Transforming KYC Compliance: Simplifying Onboarding for Meta Description: Learn how advanced technology can streamline KYC compliance, making onboarding easier for customers in the financial services sector. URL: https://financedigest.com/know-your-customer-lets-make-this-easyhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/kyc-1736838639439-compressed.png) _By **James Adie,** VP of Sales, EMEA, Ephesoft_ If you work in the financial services sector, you’ll know that a customer’s decision to choose your product or service is just the beginning of the story. Ahead lies a treacherous onboarding journey during which your customer may abandon you at any point. And one of the most likely points at which to lose them is during the [process of checks and verifications that take place to ensure compliance with the Anti Money Laundering](https://www.financedigest.com/the-problem-with-current-anti-money-laundering-processes-a-lack-of-context.html "The problem with current Anti-Money Laundering processes: A lack of context") and Know Your Customer (KYC) regulations that are required of financial services organisations. The reasons behind the regulations are entirely valid; no financial [services company wants to be the unwitting provider](https://www.financedigest.com/can-companies-minimise-their-dependency-on-cloud-service-providers.html "Can companies minimise their dependency on cloud service providers?") of the means for a customer to launder money for criminal or terrorism purposes. It’s essential to make sure that the customer is indeed who they claim to be. But the way things stand, the process for making these checks is far too onerous. Most financial services [providers](https://www.financedigest.com/tech-amigos-provides-unrivalled-aws-cloud-service-support-for-autorama-groups-leading-brand-vanarama-2.html "Tech Amigos provides unrivalled AWS cloud service support for Autorama Group’s leading brand, Vanarama") are aware that customers see onboarding as a necessary evil to access their products and services, yet for many customers, the KYC regulations are a major deterrent. At the very least, a name, photograph, residential address and date of birth all need to be checked against official documents. Frequently this involves an in-person visit to a [bank or an office](https://www.financedigest.com/deutsche-bank-names-eigendorf-new-chief-sustainability-officer.html "Deutsche Bank names Eigendorf new chief sustainability officer"), at which point a high percentage of customers decide that it’s just not worth the hassle. One large UK retail [bank reported](https://www.financedigest.com/credit-suisse-shares-hit-record-low-after-report-bank-is-looking-to-raise-cash.html "Credit Suisse shares hit record low after report bank is looking to raise cash") that a staggering 60% of potential customers abandon their application when asked to present their documentation in person. This is hardly surprising. Few financial sector organisations still have a UK-wide network of high street offices, with more than [3,500](https://www.which.co.uk/money/banking/switching-your-bank/bank-branch-closures-is-your-local-bank-closing-a28n44c8z0h5) bank branches closing in the past five years. So, even without a [global pandemic](https://www.financedigest.com/outbreak-of-the-covid-19-pandemic-is-expected-to-severely-affect-the-global-packaging-and-labelling-services-market.html "Outbreak of The COVID-19 Pandemic is Expected To Severely Affect The Global Packaging And Labelling Services Market ") the simple request to visit an office is already a significant challenge. Furthermore, we are still asking customers, who are used to transferring money between accounts at the touch of a button, to produce proof of residence via a paper utility bill, something which is itself now largely obsolete. **Let’s make things easier** It needn’t be like this. [Technology in financial services has advanced](https://www.financedigest.com/how-advanced-self-service-technologies-are-changing-the-face-of-finance.html "How Advanced Self-Service Technologies are Changing the Face of Finance") enormously in the past two decades and KYC compliance does not need to remain trapped in the 1960s. - **Capture the data** The first [step is to help the customer](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW") to provide the information needed. Most paper documents can be scanned via a mobile phone, while online documents can be converted into an image or a PDF; there should be no need to stuff a sheaf of papers into an envelope. The [important element is to use software](https://www.financedigest.com/rd-tax-important-exemptions-and-upcoming-changes-for-the-it-software-industry.html "R&D Tax: Important Exemptions and Upcoming Changes for the IT & Software Industry") that can learn to recognise different types of documents and then classify and extract the relevant data. It should be able not only to distinguish between a gas bill and a birth certificate but to extract the vital details – such as name, address, and date of birth – from each. By capturing these details from every single document, you can be sure that they are consistent before submitting the customer record for further [AML or credit checks](https://www.financedigest.com/aml-and-identity-checks-lessons-learned-from-the-natwest-case.html "AML and identity checks: Lessons learned from the NatWest case ."). Any discrepancies can be flagged early and fast. - **Check the data** Having verified the essential information, a whole variety of further controls can be applied according to the level of scrutiny required. This might include biometric verification such as [facial recognition](https://www.financedigest.com/how-ai-looks-set-to-power-facial-recognition-passport-adoption-across-southeast-asia-post-covid.html "How AI looks set to power facial recognition passport adoption across Southeast Asia post-COVID") via a video selfie, but in all cases, the data in the documents can be crossed-checked against the information submitted in the customer’s application. Figures on a [bank statement](https://www.financedigest.com/bank-of-england-statement-on-purchase-of-long-dated-bonds.html "Bank of England statement on purchase of long-dated bonds"), for example, can be compared against the stated income or monthly spending declared by the customer. Again, if discrepancies arise, they can be flagged quickly, rather than waiting weeks for a manual check to take place. The new breed of [fintech is already ahead](https://www.financedigest.com/looking-ahead-2022-fintech-predictions-and-reflections.html "Looking Ahead: 2022 Fintech Predictions and Reflections") when it comes to onboarding. Monzo, for example, with no branches, invites customers to “open a new [current account](https://www.financedigest.com/coffee-current-accounts-and-the-commoditisation-conundrum.html "Coffee, current accounts and the commoditisation conundrum") while you wait in the queue to buy your lunchtime sushi or sandwich.” All documents are submitted online, with further KYC information, such as changes in income, gathered during the lifetime of the customer. [Revolut also promises new customers that they can join](https://www.financedigest.com/hospitality-needs-to-join-the-contactless-revolution.html "Hospitality needs to join the contactless revolution ") “in minutes”. The sheer convenience of these services will be stealing the [next generation of customers from the established banks](https://www.financedigest.com/the-next-generation-of-customer-experience-in-banking.html "The next generation of customer experience in banking") if action is not taken soon. In order to stay ahead of these competitors, insurance companies and other financial institutions need to make [changes quickly](https://www.financedigest.com/seeking-right-tone-new-uk-pm-truss-had-to-quickly-change-gear-for-queen.html "Seeking right tone, new UK PM Truss had to quickly change gear for queen"). Investing in the right technology can slash administration times and improve productivity, cutting costs for the company and transforming the [customer experience](https://www.financedigest.com/is-your-customer-experience-exceptional.html "IS YOUR CUSTOMER EXPERIENCE EXCEPTIONAL?"). There’s everything to play for, and a vast [market of potential](https://www.financedigest.com/modified-starch-market-potential-growth-share-demand-and-analysis-of-key-players-forecasts-to-2032.html "Modified Starch Market Potential Growth, Share, Demand and Analysis of Key Players – Forecasts to 2032") customers for whom onboarding can become a smooth, painless, and rapid process. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---