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.
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).
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.
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.