Based on statistics, between 60% and 70% of the entire retail customer base that a bank on-boards is low risk. Yet, the operational on-boarding processes of KYC and due diligence teams are almost the same on all customers, irrespective of risk. This bank managed to automate the 60% and allow the teams to focus on the 40% only, leading to increased efficiencies across the board.
Most banks are nowadays focusing on improving the on-boarding experience for retail customers whilst focusing on streamlining the process and making it more efficient. In most situations however, these banks fall in the trap of focusing only on the client facing solution, causing a backlog in the operational side of maintaining such a constant flow of customers.
This offshore Bank has embarked on a major project to be able to streamline the entire flow of retail customers, starting from the on-boarding aspect (which is purely client facing) and also the automation in operational process flows using KYC Portal. Their vision prior to this project was quite detailed and covered the entire workflow stream of what happens with retail applications based on triggers and defined rules. A project that took 6 months to complete, allowing them to offer a more frictionless on-boarding process to their customers without increasing the work-load on their compliance teams.
Focusing on streamlining the on-boarding process of retail customers is a specific task which has an impact on a number of different operational processes within the bank. We started off the dedicated workshops with the operational team of the bank, their IT teams, business processing department as well as compliance. All of whom would be heavily involved throughout the entire project. The workshops as well as the preparation done by the bank led to identifying a number of different sectors that needed to be part of the overall project namely:
- Customer facing website (on-boarding module)
This was an integral part of the project whereby a specific custom on-boarding solution was built and designed in line with the brand requirements of the bank. A customer facing web portal that allows the potential retail customer to input their respective details. A stepped approach that is accessible via any web interface and also fully responsive for mobile devices. This module guides the user into what needs to be done and filled. Based on the data being populated the system will prepare the required banking documentation which is automatically prepopulated with the client’s data. These documents are presented to the user to be able to review and sign-off. KYCP has been integrated with a third party called HelloSign so that throughout the same interface the client can digitally sign the respective documents. Next step in this process is the online verification, for which we integrated the system with Jumio. The customers present their identification documents (e.g. driver’s license or passport) and verify themselves through a very neat user experience. The user is then guided to the final step which is that of checking all the details and submitting the application.
- Backoffice / Operational and Compliance Teams (KYC Portal)
Once the application is submitted, the above custom on-boarding solution transfers all the data to KYC Portal as a new application through the authenticated API of KYCP. The application is received with all the data that the user submitted including the digitally signed forms, the audited verification from Jumio as well as all the identification documents. Once the application is in KYC Portal, the risk is automatically calculated in real time based on the configuration that the bank have defined. KYCP allows for all the regulatory process to be tweaked based on their requirements, which configuration came as a result of the workshops between the respective teams. KYC Portal has also been integrated with ComplyAdvantage to be able to check if there are any matches on PEPs, Sanctions and Adverse Media on the client. Within a matter of minutes, KYC Portal has an entire picture of all that needs to be known to allow an agent within the compliance team to be able to take a decision. However, this bank took it a step further and used the embedded workflow engine of KYCP to automate the decision-making process too. Using the rules engine in KYCP, they configured the system to be able to process decisions in an automated way. One of the aspects that increased efficiencies with this approach was the approval of low risk customers. They set KYCP in a way that if a customer has been successfully verified by Jumio, the risk is green (low), the expected documents are signed and there are no matches from ComplyAdvantage then the respective customer is set to APPROVED without any human intervention.
- AML team (Transaction Monitoring Engine)
The bank has also opted for the real time transaction monitoring engine of KYCP. Thanks to the unique identifier of any customer being on-boarded this engine is constantly checking for any anomalies that the AML team would need to be alerted on in real time. This engine will alert KYCP directly when such anomalies happen and update specific data on a subject which in turn can have a repercussion on risk in an automated manner.
- Core banking system
This entire system has been integrated with the bank’s digital core banking solution Mbanq. The integration further automates processes and instantly benefits low-risk customer onboarding (which is usually 60% to 70% of the entire customer base) through strongly reducing the time of opening an account. Mbanq has uniquely designed its technology to seamlessly open the account for any APPROVED customer from KYC Portal whilst significantly decreasing manual procedures.
- Third party data providers
As one can see from the above description of this specific use case, this project required integrating with various third parties all of which have excellent technologies in their own right and all of which have APIs to allow for more secured and defined integrations. All the parties have been selected by the bank to deliver this overall project.
This offshore Bank has embarked on a challenging yet innovative project that is fully focused on offering a smooth on-boarding experience for their retail customers and a solution to streamline the back-office and operational challenges on maintaining such customer relationships going forward. A system that is focused on reducing risk and cost on all subjects.