# Seven golden rules to follow when implementing KYC process
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-06-22
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: 7 Golden Rules for Implementing KYC Processes in Financial Services
Meta Description: Discover essential guidelines to execute efficient and customer-centric Know Your Customer processes for financial services firms, ensuring compliance and
URL: https://financedigest.com/seven-golden-rules-to-follow-when-implementing-kyc-processhtml

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_By **Nora Beqaj,** Business Director,_ [_The Nest UK_](https://thenest.webhelp.com/)

Know Your Customer (KYC) is a regulatory requirement for all regulated financial services organisations to identify their customers. Banks must put faces to their client names during their authentication and onboarding activities to prevent illegal activities such as money laundering, terrorist financing or tax evasion.

Traditionally, onboarding has always taken place in person. However, FinTech companies have completely [transformed and evolved consumers’ expectations for a banking experience](https://www.financedigest.com/transforming-the-banking-experience-to-be-mobile-first-and-people-centric.html "Transforming the banking experience to be mobile-first and people-centric"). With the [Covid-19 pandemic changing the way we all live](https://www.financedigest.com/freedom-day-sydney-reopens-as-australia-looks-to-live-with-covid-19.html "‘Freedom Day’: Sydney reopens as Australia looks to live with COVID-19") and go about business, the digital transformation came at a crucial time.

The fight against fraud is a [major stake](https://www.financedigest.com/deutsche-telekom-reaches-majority-stake-in-t-mobile-u-s-ceo.html "Deutsche Telekom reaches majority stake in T-Mobile U.S. – CEO") of a Financial services firm’s business model. From the very beginning of any customer activity, it must be considered to avoid violating regulations. This risk requires implementing KYC processes that meet both the financial and legal stakes, but the key here is to execute without [reducing flexibility](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS") and agility within the customer journey.

KYC processes require a delicate balance. They should be fast and efficient enough not to be dissuasive, but robust and rigorous enough to engender trust between both parties, most notably though they [must ensure a seamless customer](https://www.financedigest.com/time-merchant-acquirers-extra-mile-customers-first-sector-must-learn-mistakes.html "It is time merchant acquirers to the extra mile for their customers. But first the sector must learn from its mistakes. ") journey for the end-user. The perfect balance consists of people with the knowledge and technological capability to support and implement the [process while ensuring the process is as efficient](https://www.financedigest.com/1-easy-tip-to-make-a-key-e-commerce-process-more-efficient.html "1 easy tip to make a key e-commerce process more efficient") and seamless as possible. And this perfectly balanced execution can give a competitive advantage.

With this in mind, here are seven golden rules to follow when it comes to implementing KYC processes:

1/ One of the main challenges of emerging [FinTechs will be to develop a seamless experience for their customers](https://www.financedigest.com/how-fintech-aids-financial-inclusion-and-helps-customers-through-crises.html "How Fintech aids financial inclusion and helps customers through crises"). Making client relations central to the KYC procedure is non-negotiable. It is an opportunity to improve the relationship with the end [customer and boost their loyalty](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") over the long term. Every business will need to [invest in the customer journey as it will key to maximise transformation rates and avoid tarnishing brand](https://www.financedigest.com/5-compelling-reasons-that-you-should-invest-in-branding.html "5 Compelling Reasons That You Should Invest In Branding") image. [Customer experience](https://www.financedigest.com/the-new-client-adviser-experience-in-the-age-of-the-customer.html "The New Client-Adviser Experience in the Age of the Customer") should be simple, fast and effective to ensure customer buy-in.

2/ End customers might have questions about completing the onboarding process or may be reluctant to [provide required personal data](https://www.financedigest.com/how-insurance-providers-are-starting-to-use-adas-data-to-price-cover.html "How insurance providers are starting to use ADAS data to price cover") to complete the KYC. It is [critical to set](https://www.financedigest.com/pm-rishi-sunak-sets-out-priorities-for-britain-responds-to-critics.html "PM Rishi Sunak sets out priorities for Britain, responds to critics") up a dedicated telephone hotline right at the start of the project to give customers easy access to agents’ expertise. This will help [solve customers’ problems](https://www.financedigest.com/british-start-up-reveals-the-secret-to-solving-the-problem-of-identity-fraud.html "British start up reveals the secret to solving the problem of identity fraud") and strengthen the relationship while and maximising the onboarding rate.

3/ Although the process of remote identification is continuously evolving, there is not a [platform that can fully automate](https://www.financedigest.com/banking-on-snow-automation-platform-for-success.html "Banking on Snow Automation Platform for Success") operations. While technology can accelerate processes and improve [customer experience](https://www.financedigest.com/allianz-benelux-taps-into-modern-data-management-to-combat-fraud-and-foster-a-positive-customer-experience.html "Allianz Benelux Taps into Modern Data Management to Combat Fraud and Foster a Positive Customer Experience"), people can provide value-added analysis, manual fallback and customers interactions. Consequently, falling [back on an end-to-end solution mixing technological and human](https://www.financedigest.com/putting-the-human-touch-back-into-banking-magazine.html "“Putting the human touch back into banking”-Magazine") elements is the guarantee of operational efficiency and process optimisation.

4/ Because KYC is a [complex and time-consuming process](https://www.financedigest.com/board-report-highlights-complex-decision-making-process-across-banking-and-finance-sector.html "Board Report Highlights Complex Decision-Making Process Across Banking and Finance sector") involving many legal, technical and organisational constraints that differ from country to country, businesses may be wise to outsource this procedure. [Choosing a trusted and experienced partner will considerably ease international](https://www.financedigest.com/choosing-to-challenge-thoughts-on-international-womens-day-2021.html "Choosing to Challenge – Thoughts on International Women’s Day 2021") development and add flexibility and scalability with regulatory understanding.

5/ KYC isn’t just about controlling data and documents, it’s about [building an end-to-end process](https://www.financedigest.com/li-cycle-to-build-french-battery-processing-facility.html "Li-Cycle to build French battery processing facility"). Results of these controls will not always be positive as they are highly dependent on the quality of the data and documents. You should anticipate rejection cases that could lead to breaking the onboarding journey. Building an automatic and multichannel reminder workflow is essential to stay in touch with the customer. Reminders can be sent via email, text messages or even via a human in a [customer service](https://www.financedigest.com/customer-engagement-trends-that-will-rule-banking-and-financial-services-in-2021.html "Customer Engagement Trends that Will Rule Banking and Financial Services in 2021") outbound call. During this critical phase, effectively managing relationships with the customer is crucial and can be an excellent opportunity to [strengthen client](https://www.financedigest.com/bny-mellon-strengthens-support-for-treasury-services-clients-in-germany-with-appointment-of-gungor-taner.html "BNY MELLON STRENGTHENS SUPPORT FOR TREASURY SERVICES CLIENTS IN GERMANY WITH APPOINTMENT OF GÜNGÖR TANER") satisfaction and brand reputation.

6/ It is important to define a methodology that should include meticulous [planning and topic-focused workshops to prepare for each project](https://www.financedigest.com/hungarian-instant-payments-project-progressing-as-planned.html "Hungarian instant payments project progressing as planned") phase. Doing so can allow you to anticipate technical, operational, or human pitfalls prior to launching.7/ You should [establish a reporting procedure with specific and measurable KPIs to monitor project achievements and make potential adjustments as needed](https://www.financedigest.com/insurtech-why-established-players-need-to-act-fast.html "Insurtech: Why Established Players Need to Act Fast"). Building such a process will allow greater control of the project execution, ensure it is delivered on time, and will allow for minor adjustments to be made as needed.

These seven [golden rules will allow a business](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes") to get the most from its KYC initiatives. KYC operations shouldn’t just be considered to [prevent fraud](https://www.financedigest.com/payroll-fraud-and-how-to-prevent-it.html "Payroll fraud and how to prevent it"). Instead, by leading to more transparency and security, KYC can act as a competitive factor to help [financial services](https://www.financedigest.com/why-a-rules-management-system-can-untie-financial-services-hands.html "Why a rules management system can untie financial services’ hands") businesses enhance their reputation and build trust with their end customers. After all, this is one of the most valuable assets for any [financial services](https://www.financedigest.com/how-financial-services-leaders-can-prioritise-cybersecurity-investment.html "How financial services leaders can prioritise cybersecurity investment") business.

_The_ [_Nest_](https://thenest.webhelp.com/) _by Webhelp_ _aims to support startups and scaleups to provide the best-in-class customer experience._ _The Nest enables fast-growing companies across all sectors [to grow exponentially](https://www.financedigest.com/the-diabetic-gastroparesis-market-to-grow-at-an-exponential-substantiation.html "The Diabetic Gastroparesis Market to grow at an exponential substantiation") by offering a unique, tailor-made outsourced CX proposition._


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