7 key benefits of automating your KYB process

automated kyb

For every regulated firm, ensuring a robust KYB process is essential for compliance and risk management and it is a cornerstone of success in the digital payments sector. Especially when you consider that financial crime and fraud is predicted to cause more than £250bn of losses by 2027 in the payments sector alone according to Juniper Research.

When onboarding new merchants or businesses, it is crucial for payment service providers to accurately vet and verify the legitimacy of the business, the directors and UBOs behind the business, and its overall risk profile.

Traditional KYB methods however, can be cumbersome and time-consuming, hampering customer experience and slowing business growth. Automated KYB software presents a huge opportunity for firms to transform the onboarding process, providing a number of significant benefits for both compliance teams and businesses alike. 

In this article, we explore 7 key benefits of automated KYB for enhancing customer experience and fostering business growth. 

1. Allowing teams to reclaim valuable time

Traditional KYB methods often require manual verification of business information, which can take days or even weeks! Automated KYB can significantly speed up this process for new customers, enabling real-time verification, allowing new merchants and businesses to be set up on your payments platform quickly and easily. 

Such speedy onboarding not only gets customers off to a great start in terms of satisfaction by reducing wait times but also enables your payments firm to start generating revenue more quickly. The quicker your customers can process payments through your platform, the quicker your business receives revenue. 

By automating routine tasks, compliance team members can redirect the focus towards more strategic activities such as improving overall compliance strategies and risk assessment processes. This, in turn, will boost team efficiency but allow team members to invest their time into higher value tasks that foster a proactive, nimble compliance function.

What’s more, compliance leaders can rest assured that regulatory requirements are being met without compromising on efficiency or customer experience.

2. Improved accuracy and reduced human error

When conducting KYB checks manually, your team is running the risk of missing something, overlooking a key piece of information that may adversely affect a customer’s risk profile. Human error is exactly that, human. But, in the world of AML compliance, one error can be costly, leading to compliance breaches, fines, and reputational damage. 

Automated systems are able to collate information for each KYB check from across the globe, cross-checking information across multiple sources, connecting that data and presenting it to your compliance team in a way that is accessible and actionable, while ensuring accuracy each and every time.

With a reliable foundation for compliance, this accuracy is crucial for compliance leaders to have complete confidence in their organisation’s compliance with strict regulatory standards.

3. Scalability as your business grows

As your business grows and expands into new markets and geographies, the ability to scale compliance processes at speed becomes critical. Automated KYB systems are, by design, inherently scalable, capable of handling a surge in KYB checks and verification requests without compromising speed or accuracy.  

This flexibility allows payment firms to ensure that compliance and merchant onboarding processes are able to keep pace with business expansion and support sustainable growth. 

For compliance leaders, this means they can have every confidence in managing a growing customer base without a corresponding increase in workload or need for additional headcount in the form of analysts to onboard a spike in customers. 

4. Real-time monitoring and updates

Risk profiles can change dramatically from the beginning of a commercial relationship, increasing risk and the threat of financial crime, and the need for real-time monitoring of clients is important for compliance with AML requirements.

Automated KYB systems ensure that business information and risk profiles are always current and accurate, throughout the entire customer lifecycle. Traditional KYB methods rely on periodic reviews at defined intervals, which can leave gaps in compliance and knowledge of the customer in question with outdated information.

With continuous real-time monitoring for changes to individuals or organisations (including global sanctions, negative media, new directorships and political exposure), compliance leaders have round-the-clock oversight of the very latest information and can respond swiftly to any changes in a business’ status or risk profile. 

5. Better customer experience

The cumbersome nature of manual KYB processes can have a negative impact on the customer experience during the initial onboarding process, leading to friction and an increased potential for abandonment before being onboarded. 

By automating your KYB process when onboarding merchants and businesses, customers will enjoy a seamless and user-friendly experience, with quick and efficient, but still compliant, verification processes. 

This modern customer experience will in turn improve satisfaction and build loyalty, as business can be onboarded without unnecessary delays or complications. 

6. Extensive data coverage to navigate complex corporate structures

For most manual KYB checks, compliance teams are plagued by hours upon hours of desk research, scouring countless corporate databases across multiple data providers to uncover the information that your payments firm requires to onboard each customer. Hours that could be better spent on more valuable, strategic compliance projects. 

Notwithstanding the challenges facing compliance teams around restrictions on data access in certain countries that limit the information that is available. Local regulations may limit the availability of crucial information, holding up the verification process. What’s more, a lack of local knowledge about where to look for the information needed can hinder effective due diligence, while language barriers further exacerbate these challenges. Together, these factors combine to create a melting pot of obstacles for compliance teams striving to perform thorough and accurate KBY checks on international businesses.

With automated KYB systems, your team will benefit from integrated, aggregated data from multiple international sources, providing a comprehensive view of business structure, its directors, relevant documentation, financials, UBOs, PSCs, and more on a global scale. 

KYB platforms can access and collate data from multiple sources to create a detailed profile of the business being onboarded. This ensures a thorough and accurate KYB process with the reassurance that your team has all the information they need to make informed onboarding decisions. Armed with a 360-degree, holistic view of each corporate client or merchant, your team can proactively reduce the risk of oversight and ensure a thorough KYB onboarding process.

7. Cost efficiencies

The cost of manual KYB can be substantial, plagued with labour intensive processes, extensive paperwork, and multiple data providers to search. Automation reduces these costs by streamlining workflows and minimising the need for manual intervention. By investing in one end-to-end KYB and ID&V solution, your compliance team can achieve significant cost and time savings in the long run. 

The cost (both financial and human resources) efficiency of automated KYB means more resources and focus can be placed on higher-value tasks such as strategic risk management, regulatory analysis, and the exceptional cases where your professional expertise is most needed.

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