Race to As-a-Service For Banking KYC

The banking and financial services industry has had a recurring issue brought to its notice for the last 3 years – the gaps in anti-money laundering (AML) standards, know your customer (KYC) processes and other regulatory requirements. The market has witnessed a slew of AML fines for global financial institutions just in the last 12 months, and the issues are not diminishing anytime soon. Rather, the post-recession reality has regulatory change at its forefront, including the continued expansion of AML, KYC and on-boarding regulations.

The multi-billion dollar fines have thrown a spotlight on the financial implications of this issue for everyone from large global financial institutions, asset managers, broker/dealers to smaller, regional banks. These companies are vastly underprepared to cope with the magnitude of regulatory scrutiny and compliance requirements and the resultant procedural, operational and technological changes to bring themselves up to code.

Traditional KYC methods are cumbersome and duplicative – each customer has to share the same data with each financial institution, and the records need to be maintained accurately for each entity. Thus beyond the initial legwork in customer on-boarding, KYC remediation creates ongoing work particularly as compliance requirements keep changing for different jurisdictions and asset classes. But research, due diligence and data management is only part of the solution needed here.