Bank’s KYC Update Policy Results in 20% Operating Cost Reduction
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A global bank has achieved a significant reduction in operating costs by updating its Know Your Customer (KYC) information only when certain trigger events occur, rather than conducting regular calendar-based updates. This new policy has resulted in a 20% reduction in operating costs and is expected to improve efficiency and reduce manual work for KYC analysts.
The Secret to Unlocking Advanced KYC Programs
According to industry experts, the key to unlocking the impact of advanced KYC programs lies in five essential ingredients:
- Risk-Driven Design and Customer-Risk Management: A focus on low-risk customers has enabled the bank to optimize its KYC processes.
- Digitization and Optimization of the Customer Experience: By digitizing the customer experience, relationship managers can focus on high-value activities rather than administrative tasks.
- Data and KYC-Program-Risk Analytics: Advanced analytics enable the bank to identify areas for improvement and make data-driven decisions.
- Intelligent Process, Case, and Policy Automation: Automation has reduced manual work and improved efficiency.
- Creation of a Center of Excellence: A centralized team has been established to oversee KYC program development and maintenance.
Building a Holistic Approach
To achieve these goals, banks must build a holistic set of technological and non-technological capabilities across each of the five ingredients. This requires more than just relying on technology; it also demands developing a comprehensive approach that incorporates both digital and human elements.
Prioritizing Initiatives
The bank’s success is attributed to its decision to prioritize initiatives such as:
- Process Efficiencies: The bank has optimized its KYC processes, reducing manual work and improving efficiency.
- Talent Management: The bank has developed a team of skilled KYC analysts who are equipped to manage the new policy.
- Customer Experience Improvements: By embedding customer-experience metrics in individual- and team-performance management, the bank has improved the overall customer experience.
Key Takeaways
Results:
- A 20% reduction in operating costs
- Improved efficiency and reduced manual work for KYC analysts
Best Practices:
- Focus on low-risk customers
- Digitize the customer experience
- Develop a comprehensive approach that incorporates both digital and human elements
- Prioritize initiatives such as process efficiencies, talent management, and customer experience improvements