Due
diligence is an essential process for any major
business. Fundamentally, businesses need to know who they’re buying from or who they are on-boarding as clients. Nowadays with new regulations constantly being
introduced, the compliance burden and requirements for any
corporation, have increased over time and across the globe, therefore putting a strain on
compliance teams who still handle this process, manually.
We see many
companies hiring more people to ensure the information submitted is complete
and accurate and to help deal with the increasing amount of documentation
required to verify customer identities. Adding more
employees to do manual work
doesn’t solve KYC
challenges. In fact, it adds to them. The more manual tasks performed, the
greater the chance of errors and mistakes in areas such as data entry can lead
to non-compliance and
hefty KYC fines, besides the fact that manual processes
slow down your customer on-boarding.
In today’s fast-paced world, organisations
are moving away from manual KYC processes and are starting to invest in
automated solutions like KYC Portal. In its 11th annual Cost of
Compliance survey, Thomson Reuters states that compliance teams are facing a change
in the way they handle compliance obligations as budgets are shifted; “This could mean that
compliance teams are developing more effective and efficient ways of operating,
perhaps by using RegTech solutions or outsourcing arrangements.”
In another report published by Thomson
Reuters in Q1 2020, it was concluded that the financial services industry has
much to gain from the effective implementation of fintech, RegTech and
InsurTech – “There are nevertheless considerable benefits to be gained from
implementing such solutions. For risk and compliance functions, much of the
benefit may come from the ability to automate rote processes with increasing
accuracy and speed. Indeed, when 900 respondents to the 10th annual cost of
compliance survey report were asked to predict the biggest change for
compliance in the next 10 years, the most popular response was automation.”
The survey concluded that this crisis is
putting an impact on risk and compliance budgets however, firms need to realise
that in 2020 it would be a potentially unwise time to reduce the budget
available for risk and compliance; “Under such circumstances,
appropriate resourcing and allocation of budget to the compliance function
cannot be allowed to dwindle. The ‘cost’ of compliance may be considered high,
but the costs of non-compliance are much higher both for firms and for
individuals.” “Of course, there will always be competing priorities – but in
troubled times, firms need a well-resourced, highly skilled compliance function
more than ever.”
KYC Portal focuses on streamlining and
automating the back-office of any due diligence process. It allows you to do
this by integrating with any 3rd party service provider of your choice from ID
Verification to Screening Services, giving you a centralised, due diligence
workflow solution. Having KYC Portal as part of your compliance function and
team, it allows you to focus more on the important tasks at hand whilst reducing your risk
exposure to mere hours instead of weeks or months which is a top priority
in the world we are living in right now.
You can access the full Thomson Reuters
survey “Cost of Compliance: New decade, new challenges”
here.
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