The pandemic has driven a surge in the adoption of digital channels to access financial products and services. Around the world, customers are flocking to digital for the flexibility and convenience it provides. Banks and financial institutions are working hard to meet the demand and deliver exemplary customer experiences, but many are falling way short.
According to a recent report carried out by Signicat, 63% of customers abandoned their digital bank applications last year. More than ever before. The need to adapt to this rapidly shifting customer behaviour is made all the more difficult by fragmented regulatory frameworks and the growing global nature of financial services and business in general.
New money laundering regulations only add to the challenges in making application processes slick, streamlined, and fast. The increasing volume of information customers must provide creates more friction in an already fragmented and arduous process which is leaving many customers frustrated and preventing organisations from bringing customers on board.
At DueDil, we help our clients tackle regulatory compliance by providing the data financial firms need to quickly assess a customer and bring them on board. And we also help them manage risk, stay compliant, and monitor customers throughout their engagement.
Creating a comprehensive view of a business customer
Application processes are designed to reveal the nature of a business, its risk profile, and potential for growth. Known as Know Your Business (KYB) checks, these comprehensive processes are to help liminate fraud, prevent money laundering, and stop other bad actors from securing investment, opening accounts, or otherwise accruing debt without any intention of paying it back.
Born out of a compliance requirement – particularly in heavily regulated industries - they demand swathes of information be supplied by customers and as a result can take weeks or even months to process. Building a complete picture of the organisation takes time, accurate data, analysis, and some astute decision making. But it doesn’t have to take so long.
Financial organisations must build a comprehensive view of the customers they are looking to work with quickly, and find ways to remove friction throughout the application process to deliver experiences that differentiate, build competitive advantage, and drive scalable growth. Leveraging multiple data sources and bringing them together simply is fundamental to tackle both of these challenges.
Onboard with speed and trust
Developments in fintech and regtech allow financial organisations to bring together datasets, build ecosystems, and leverage APIs to connect verified company data into existing onboarding workflows. DueDil’s Business Information Graph (B.I.G.)™ ingests billions of high veracity data points and processes them with Machine Learning before returning accurate business insights via our best in class API. As a result, clients are able to onboard quickly, enhancing the customer experience while remaining compliant with industry regulations.
Our clients plug our solution into their webforms, for example, and auto-populate fields for customers to dramatically shorten the time it takes to complete an application. Banked can verify businesses in a matter of seconds rather than a day. And Santander UK has reduced its new customer onboarding times by nearly 80% for three-quarters of customers.
Bringing together multiple datasets and aggregating access at the moment of truth, our clients can quickly see whether the customer is who they say they are, whether they can be trusted, whether they fall within their risk appetite and make better decisions.
The need for continuous monitoring and how to automate it
Getting customers onboarded quickly and efficiently is just the first step in the lifecycle of the engagement. What the customer looks like, where it operates from, who the directors are, the number of employees it has, and its financial profile can change at any point. Our data shows that in the UK alone there are as many as 10,000 changes to organisations every single day. Keeping on top of those changes to stay compliant and mitigate risk is an ongoing process and KYB should be viewed as such.
Current practices to track and update customer information are expensive and time-consuming – particularly if a large percentage of the customer base is SMEs. Combine these costs with the inevitable remediation from missed accounts due to human error and the overwhelming number of customers to chase and the need to double down on proactive customer monitoring comes sharply into focus.
Failure to act comes with double jeopardy too. Firstly, you could expose yourself to financial crime and then you can be penalised for exposing yourself to that financial crime through poor processes and checks. The good news is that in-life monitoring tools are now making it easier for compliance and risk teams to spot changes and stay on top of them as and when they occur.
DueDil’s latest product innovation, Continuous Updates, enables clients to monitor changes to a customer’s information throughout the lifecycle of the engagement. Leveraging insights surfaced by our B.I.G.™, Continuous Updates notifies clients of when something has been amended making it easy to monitor the businesses they care about and automate the process of keeping customer data accurate and up to date.
Painful remediation can be largely eliminated, and relationship management teams can be free to add value to customers rather than chase for the latest information. It is helping clients be more proactive in their approach to customer engagement and providing the time and freeing the resource to explore new projects and develop new products.
This editorial was first published in our Financial Crime and Fraud Report 2021 - How to Fight Fraud and Master KYC, Onboarding & Digital ID, which provides a comprehensive overview of the major trends driving growth in fraud prevention, identity management, digital onboarding and KYC, transaction monitoring, financial crime compliance, regtech, and more.
About Justin Fitzpatrick
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