Financial institutions register increased costs for KYC compliance

Friday 27 October 2017 09:49 CET | News

A Thompson Reuters survey has revealed financial institutions with USD 10 bln or more in revenue have seen their average spend on KYC-related procedures increase to USD 150 mln in 2017. 

Despite their ongoing investment, banks claim that it now takes 26 days on average to onboard a new client, up from 24 days a year ago. Both groups surveyed expect on-boarding times will rise again in 2018, with financial companies anticipating a 12% increase, while their corporate clients contrastingly view that on-boarding times will increase by 24% in the next 12 months.

For financial companies, documenting and maintaining current KYC records to keep compliant remains difficult, with just 18% of banks surveyed only taking action when an event occurs to trigger a KYC review. And in 2017, 30% of corporate respondents make their banks aware of all material changes involving KYC and CDD. Among financial institutions, just 8% think their clients are proactive when reporting material changes, down from 14% in 2016. 

Financial companies and corporations cited the impact of continuing KYC regulatory change worldwide in 2017 as being the biggest driver affecting their compliance processes. Three-fourths of all banks say changes in legislation and regulation are motivating them the most to explore KYC program adjustments, while changes in KYC regulation mean they need to constantly refresh their customer records to stay compliant.

The surveys – administered in April and May 2017 to an evenly proportioned set of respondents in leading regional markets in Europe (UK, France and Germany), the U.S., South Africa, Singapore, Hong Kong and Australia -- involved 1,023 respondents at financial institutions and 1,122 respondents at corporations. All were engaged within their organizations in KYC-related compliance activities, encompassing processing of and adherence to client on-boarding and CDD.

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Keywords: financial institution, KYC, bank, compliance, onboarding, survey, Thompson Reuters
Categories: Securing Transactions | Digital Identity, Security & Online Fraud
Countries: World
This article is part of category

Securing Transactions