A Final Frontier for Digital Transformation in financial services.
The global survey of over 1,000 C-suite executives across 100 corporate and institutional banks highlights the direct and opportunity costs of people-driven, manual and laborious KYC processes:
KYC operations have often been viewed as a cost center at the bottom of the list for innovation while customer-facing and revenue generating parts of the firm are prioritized.
However, change is on the horizon. The data from our survey paints an encouraging picture of changing attitudes.
Chapter One: The Full Cost of KYC Compliance
Two thirds of survey respondents said a review costs between $1,501 and $3,500. For banks that may be onboarding tens of thousands of clients every year, KYC costs alone can run into millions of dollars (up to $35 million for a bank onboarding 10,000 new clients per annum).
Chapter Two: The Technology Opportunity
Between 31%-60% of KYC review tasks are still being completed manually by over half of financial institutions. However, the data shows that financial institutions are now focusing investment on automation with 62% prioritising spend for technology.
Chapter Three: Friction Between Lines of Defence
The line of defence model creates a structure for risk management with well-defined roles and responsibilities in the first and second line. However, 46% of firms in our survey state that the approach to risk management is a point of friction between their compliance and operations teams.
say manual KYC impacts ability to make better risk decisions
average cost to complete single KYC review for a corporate
time it takes to complete one KYC review for 52% of FIs
full time employees in KYC at 52% of FIs
Stella Fau Clarke, Chief Strategy and Marketing Officer at Fenergo, joined Finextra TV at Sibos to dive deeper into why KYC compliance has never been more challenging and discusses:
- Motivation behind the research of Fenergo's KYC Report- Some results from the research- The challenges for financial institutions- How can FIs address these challenges
< Watch the interview now.
A Final Frontier for Digital Transformation in Banking
This report investigates the direct and opportunity costs of allocating huge resources to KYC functions. Authored by Stella Clarke, Chief Strategy & Marketing Officer & Cengiz Kiamil, Vice President, Strategy @Fenergo.
This webinar answers the following questions:
- Why it still takes so long to complete KYC reviews- How much it really costs?- The scale of the perpetual KYC review challenge- What manual KYC means for the employee and client experience
This infographic provides a glimpse of how KYC is done today.