 "The Future Of "Knowing Your Customer" In Banking")
With KYC gaining traction, banks must maximise the value and utility of the data and processes that they already have. According to Ovum, this is driving the transformation of existing legacy assets into an interconnected solution in which customer data is reconciled across all data sources through a common process.
A new report from the global analysts, demonstrates how compliance, credit and fraud risk management and marketing requirements related to customer information, all point to the need for a single view of the customer’s relationship with the bank.
“Banks have had their reputations tarnished over the course of the financial crisis, and managing relationships with customers has never been more important,” said Jaroslaw Knapik, Senior Analyst at Ovum and author of the report. “However, despite investments in various systems, consistent and current customer information across the bank remains elusive. The future KYC solution will reduce the total cost of owning and managing customer data, as well as keeping that data updated and enabling a single view of the customer.”
Ovum believes that the future KYC solution will consist of processes similar to those that are common today: initial screening, decisioning, and ongoing monitoring. Nevertheless, both the input and output channels are likely to be expanded to incorporate the ability to use the solution across the enterprise.
With increasingly stringent compliance requirements, banks will need to enhance their systems. This can allow broader data and document capture, enable due diligence to verify customer information, improve decisioning processes, and generate reports for both internal and regulator use.
“A single view of the customer’s relationship with the bank also means a single risk view of the same customer,” said Knapik. “This requirement necessitates the creation of dynamic customer profiles that can be amended with every new event that affects the customer. This is critical for not only growing revenues and profits, but also minimising credit and fraud risk.”
As retail banks seek to improve the value of and return from their customer relationships through monitoring, it is essential that they have a complete and accurate picture of the customer. Implementing a KYC solution avoids the potential inconsistencies that can alienate customers and trigger compliance issues.