Onboarding your business clients doesn’t have to be a painful, expensive and time-consuming experience for your client, or indeed your business.
Business owners are often asked to undertake multiple complex and burdensome processes to satisfy the regulatory obligation. For example, it is not unusual for a business to submit information on the company; company directors or beneficial owners to enable document verification; identify residential addresses and enable further in-person screening calls. Such an ineffective approach is a slow and frustrating experience for the end-user and a costly exercise for the business.
Business onboarding times are lengthy, with regulated firms reporting longer average times (30 days) and investment managers (23 days). The global average across both is 26 days (up from an average of 24 days reported a year ago) (source).
Ultimately, firms should not view regulatory compliance from an internal perspective, instead, they should be employing a customer-centric approach.
There doesn’t have to be a trade-off between efficiency, customer experience and ensuring you fulfil your regulatory requirements. Instead, in taking a holistic view of onboarding, you can deliver all the required outcomes with minimal effort, allowing the continuity of business in order to keep revenue flowing.
However, this requires time to step back, to think about how verification and compliance fit into the overall business strategy with regard to growth and delivery of the all-important holy grail of customer experience.
Time is of the essence
Directors or Beneficial Owners of a company are likely to be very busy people, and will generally have less appetite to complete the traditional manual identity verification processes to verify that they are who they claim to be. They don’t want to spend more time than they have to on manual processes. With an ever-increasing approach to all things digital, there is a demand for instant verification.
When time is of the essence and face-to-face transactions are discouraged, businesses need to own a holistic approach to their exposure to financial crime, built from a good blend of technology, collaboration and expertise.
There has been a significant uplift in the digital provision of Remote Verification over the last few years, to enable individuals to verify their identity at their own convenience, anytime anywhere, without the need to leave their office or involve lawyers in the process. With a simple click-through on a website or download of a phone app, the individual is connected, at a time and place convenient to them, to an API that covers all the requirements in one video recording that is then checked and stored to create the audit record.
The approach to providing a digital solution can seem easy on the surface but what about the disconnect that is often present internally – particularly with compliance and the commercial areas of the business.
Despite clear messages and recent examples demonstrating the costs to the business of getting this wrong, there can still be resistance to these types of checks. At NorthRow we know the importance of taking a holistic view of compliance requirements, setting these into the context of what similar firms are doing in your industry. Bad actors go for the weakest link, but with our strong track record and breadth of knowledge, we can advise on appropriately stringent but pragmatic solutions. With this in mind, we encourage early engagement in the processes, so we can assist in making the solution as efficient and cost-effective as possible, reducing any delays and friction as part of that analysis. We work within our clients’ risk appetite and stance on regulatory standards, and being part of the process can engage all stakeholders to set and meet all expectations.
Ongoing monitoring, including daily checks on changes in ownership and control, are reported and can be acted on without delay. We aren’t just taking a snapshot of the business at one point in time, it’s a continuous monitoring process that protects against the risks through the life cycle of the client relationship.
Centralised intelligence should be a common goal so that customer risk can be effectively managed and shared between teams in order to create a single customer view which is beneficial to all counterparties.
Single flow solutions
It is not just the internal process that sees disconnect. ‘Know Your Business’, or KYB, elements of onboarding business customers are often provided through ‘cobbling together’ a number of generic components into a componentised process. The identity check process may be the same as that used for a credit card check or by an employer. This saves effort and expense for the provider, but this is at the expense of shoehorning in processes intended to meet entirely different requirements.
A single point of approach to KYC controls, in which fraud prevention and AML teams share knowledge, can also enable firms to maximise machine intelligence, allowing the completion of multiple types of checks, in less time. Instead of using different solutions to complete KYC checks at different points, single solution technology can be utilised to perform checks, assess risk, verify or validate identity, and more.
I don’t see these elements as unconnected processes. Again, I believe in taking a holistic view of the required outcomes, providing a solution that represents the most effective and efficient way to meet the requirements specific to KYB. This requires some thought, to really consider how each step fits into the context of the businesses involved in the process. In applying that thinking, we don’t consider the checking of company owner identities as a chore in which those individuals should be required to invest significant time and effort. That might be an appropriate point of view for the potential credit card user, who invests that time to gain the advantages of the product they have selected. The company owner most likely has limited time, has less incentive and considerably less appetite to undergo the traditional manual identity check processes. The same logic can also be applied to KYC.
Reduced business costs with minimal time to deployment
Firms with a shared understanding of goals, centralised intelligence and understanding of the required controls to meet compliance obligations can leave fewer weak points open for criminals to exploit.
By unifying their approach they can also significantly reduce the costs associated with determining risk, onboarding and continually monitoring. All our experience within key regulated businesses shows that cost and deployment time have been barriers to making the move from a manual process to a digital solution. That is why, with our holistic approach, we have developed a single API platform that can be designed and implemented with minimal effort allowing the continuity of business to keep revenue flowing whilst delivering a great customer experience and achieving regulatory compliance.
Onboarding – the holistic way
NorthRow recognised many onboarding business blocks and developed a solution that addressed the barriers from both the business and customers perspective. A single point digital process to provide remote verification to speed up onboarding, without the need for people to spend time travelling to other offices or be present in a face-to-face environment. A solution that looked at the upward trend of financial fraud on many counterparties and the impact it has on both a personal and business perspective.
Looking to the future we recognised the need for a ‘greener’ approach to the onboarding process, with our effect on a global carbon footprint, but couldn’t have predicted the effects of social distancing from a pandemic that appeared so quickly and had such an immediate effect on business.
Companies that will grow during these changing times and evolve into the new ‘normal’ will be those that adopt a digital approach but also place customer experience high on its agenda. The more a business can do to impress with efficiency and ease of process, the better the customer experience from the outset and the better impression they get of your brand.
All of this is part of an overall vision which says we should not just pay lip service to prevent money laundering or terrorist financing. These are real risks and we are driven by that motivation. So the holistic view starts with customer experiences, relationships and risk management but is all encompassed within the need to prevent these criminal activities. If a prospect has a good onboarding experience they are more likely to remain as a customer for a longer period of time rather than adopt a migratory approach by switching to a competing service. That is what I mean by holistic.
If you want to learn more about how NorthRow can digitally transform your client onboarding, monitoring and compliance process, get started today.
Original Article placed in AltFif: (How fintechs and banks can speed up business onboarding) (Monday 27 April 2020)