Next Generation KYC

Optimizing customer experience while improving efficiency

The implementation of effective Know Your Customer (KYC) capabilities has long bedeviled the financial services industry, leading to billions of dollars in fines and hundreds of millions in annual KYC and financial crime compliance costs for many large banks.

While regulatory fines seem to have abated as remediation efforts work their way slowly through the system, the challenge is in optimizing the complex KYC mechanisms that many institutions have built. Most KYC capabilities were developed reactively to meet regulatory mandates and audit findings. This approach has led to KYC operations that are fragmented, inefficient, and massive in size and cost. The result is a situation that is unsustainable.

KYC operations need to evolve in a way that brings costs down to sustainable levels while maintaining regulatory compliance and that creates value-add for the institution in a way that goes beyond just meeting global regulators’ expectations.

FOCUS ON WHAT MATTERS: Free up relationship manager time by optimizing KYC-related activities and minimizing unnecessary back and forth with customers

ENHANCE THE ONBOARDING EXPERIENCE: Delight customers by offering a seamless and light-touch KYC experience that supports a rapid product onboarding process

UNCOVER NEW OPPORTUNITIES: Use KYC data more effectively to understand evolving customer needs, thereby providing better service


Leading financial services institutions are already taking steps to transition their KYC capabilities from a fire drill/project mode to a sustainable/business as usual mode. In many cases, however, KYC is still being treated as a large regulatory project with a “spend whatever it takes to comply” mentality.

Organizations that continue with this mindset will not only suffer higher costs, but will also be at a considerable strategic disadvantage compared to leading institutions that offer a better customer onboarding experience and effectively leverage KYC data and resources to identify and pursue growth opportunities.

In this article, we discuss six areas that are the sources of inefficiency and ineffectiveness in KYC operations today and discuss the steps that can be taken in each area to transform KYC from a significant compliance cost, to a value-generating asset.

Next Generation KYC

Optimizing Customer Experience While Improving Efficiency