How to conduct thorough KYB checks without compromising customer experience

At a time when fraud and financial crime are at record highs, safeguarding financial institutions against bad actors is paramount. In the UK, where regulatory scrutiny is strict, compliance teams play a pivotal role in upholding their firm’s defences against fraudsters and financial criminals. 

As financial crime continues to evolve in sophistication and complexity, the role of Know Your Business (KYB) checks in safeguarding businesses has become even more critical. 

However, while the importance of KYB checks is clear, firms must also prioritise delivering a seamless and friction-free customer experience. Striking the right balance between thorough KYB checks and customer satisfaction is key for success in regulated business. In this article, we explore how you can conduct comprehensive KYB checks without compromising customer experience. 

What KYB checks involve

KYB checks focus on verifying and understanding the businesses that firms are involved with. Typically, they include:

  • Confirming the business is real and registered with the appropriate authorities (in the UK, this is Companies House)
  • Gathering information about the business’ operations and ownership structure, including financial accounts, business registration documents, annual returns, and any other key documentation
  • Identifying PSCs and ultimate beneficial owners – and vetting them individually

Armed with this information, compliance professionals can assess the legitimacy of their business clients and identify any potential risks associated with money laundering or financial crime. 

🔗  How automated KYB checks can help mitigate risk in your business

How can KYB checks compromise customer experience?

While crucial for regulatory compliance, a poor KYB onboarding process can compromise customer experience. Typically, KYB checks often entail comprehensive data collection and verification, which, when conducted manually can often be lengthy, requiring customers to provide extensive documentation and information. Such delays can frustrate customers who may be eager to access financial products and services promptly. 

What’s more, repeated requests for multiple documents, proof of identification, or financial information that require customers to gather and submit copies can be burdensome. Being required to undergo KYB checks multiple times, especially if they have already provided the necessary information in the past, can create a sense of distrust and inconvenience, potentially prompting customers to seek out alternative options with your competitors.

Furthermore, poor communication or lack of clarity regarding the purpose and requirements of KYB checks can exacerbate customer frustration. Uncertainty about why certain information is being requested or how long the verification process will take can lead to grumblings among customers.

What can you do to improve the KYB process?

While KYB checks are essential for regulatory compliance and risk mitigation, businesses must be mindful of their potential impact on the customer experience. Striking a balance between thorough due diligence and providing a seamless and positive customer experience is crucial for maintaining customer satisfaction and loyalty.

Integrate technology into the KYB process: Implementing technology can streamline the KYB process. Software platforms, such as NorthRow, can help your firm to gather, verify, and analyse vast amounts of data and information for each KYB check in a matter of minutes, reducing manual effort and the time required to conduct a check.  

What’s more, automated systems can flag potential risks and discrepancies in customer profiles, allowing compliance teams to focus on high-risk cases while speeding up the onboarding process for lower-risk customers. 

Streamline customer onboarding: Simplifying your onboarding process can help to reduce the impact of KYB checks on customer experience. Firms should strive to make the onboarding process as smooth and frictionless as possible, minimising the amount of information required from customers and ensuring that any interactions with your firm is as slick as it can be. 

Sharing the reasons why these checks are required with clear communication at every step can help to reduce frustration during the KYB onboarding process. 

Make use of tools and platforms that allow customers to self-serve, upload identification documents and provide necessary information during the registration process. Clear instructions and an intuitive onboarding platform can minimise friction and speed up the time to onboard. 

Optimise onboarding workflows: Convoluted internal processes, workflows, and unnecessary steps to complete can detrimentally affect the onboarding process so it’s important to regularly review current processes to understand where improvements can be made. 

Identify any bottlenecks and inefficiencies in existing processes and implement measures to address these. At what stages do customers experience frustrations? Where do they tend to abandon the registration process before completion? Which steps in your onboarding process do you receive most support queries or questions about?

Improving these steps may involve:

  • Introducing or optimising existing software systems.
  • Reorganising team structures to better support customers.
  • Outsourcing certain tasks to third-party service providers.

By eliminating unnecessary steps and automating the most repetitive tasks, you can ensure the KYB process is as seamless as possible for your customers.

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