KYC: a revolution towards positive change

This year is set to be an exciting one for the evolution of know your customer (KYC) practices.

With the newly developed innovative technologies, manual KYC processes can finally evolve to lowering operational costs, reducing the burden of scaling resources to deal with large remediation programmes whilst still maintaining sufficient regulatory compliance and oversight, using data driven solution technology which reinvents the way data is collected and used.

Compiling a KYC record manually from endless searching on the internet to obtain the correct information from corporate registries, regulators, stock exchanges and company websites can take hours to complete. With the use of technology, this process can now be reduced to minutes, based on an artificial intelligence (AI)-driven application that integrates directly to external and internal sources and harnesses the data at near real-time, flags entity conflict data from different sources and is fully configurable to accommodate different policies and rule sets.

I had to work twice as hard to break through some of the glass barriers, perceptions and biases that existed from being a woman in financial services – especially as a woman without a degree

Increased adoption of perpetual KYC

2021 will be the year of perpetual KYC with financial institutions moving away from traditional manually driven periodic refresh cycles of collecting data to continuous KYC, where customer records are reviewed based upon key triggers which detect when information has changed – rather than waiting on a periodic re-checking of information held on file which delays the collection of crucial data.

This is achieved through the detection and analytics engine that can monitor changes such as director and beneficially owner changes, applying rules from configured sources, policies, risk modelling and validation to determine the materiality of a change and alerts the analyst via their workflow system. Moving to perpetual KYC reduces the risk of inaccurate data being associated with an entity, which under current processes can be one-to-five years before a change is detected.

Perpetual KYC has been the target and the vision for many financial institutions who have large operational teams manually retrieving data for tens of thousands of entities every year. The demand for automated data is consistent across the globe with financial institutions across US, Asia and Europe looking to streamline data collection processes for their KYC and related teams.

Fresh job roles for the fintech industry

With data available at near-real time, it will be exciting to see how current KYC roles will develop, as well as the new career opportunities that will arise from the innovation of new technologies. Today’s data processing roles will evolve to enhance quality assurance, specialist roles in supervised machine learning, business user developer and client experience roles.

And hopefully these roles will be just as accessible to women as they are to men. It is well documented that there is gender balance to tackle across fintech’s where women represent just 14% of fintech boards and in 2017 women represented just 29% of the fintech workforce (Oliver Wyman Report Women in Financial Services 2020). While I am proud that within my business unit, we have a great female representation with 59% of the team being female, there is still work to do at the more senior level.

Having worked as a customer lifecycle management (CLM) and KYC practitioner for more than 20 years, my experience of diversity and career progression has vastly changed from when I started out. Looking back, I realise I had to work twice as hard to break through some of the glass barriers, perceptions and biases that existed from being a woman in financial services – especially as a woman without a degree. For a long time, I was the only person in my department without a degree qualification and it was made aware that certain roles would not be available to me. Taking time off to have my three children also brought about some common misconceptions that I had to deal with, for example that I wouldn’t be able to work as hard and I wouldn’t be able or want to travel for work.

However, this gave me the motivation to work even harder and helped me to find my voice to address the misconceptions. Today, those perceptions are not as obvious but there is still a way to go to address some of the unconscious gender bias that still exists which have become more apparent with the increased focus on diversity and inclusion in the workplace.

Revolutionising outdated practices

The increased adoption of perpetual KYC technologies will foster positive change to industry by two-fold: it will allow financial institutions to revolutionise their outdated practices and create enhanced user and client experiences, while also creating exciting new job roles.

The opportunities and breadth of roles that are now being created across the fintech space are developing at speed and there is a requirement to have a balance of creating great technology, harnessing and understanding the use cases and importantly how new technology can be created with the user and client experience in mind. There will be some fantastic opportunities for women to take up these roles and embrace and work together towards a more diverse work culture. This will become the normal to a point where we do not have to refer to numbers and quotas.