Here's how you can automate the KYC verification process within a chat

 Client onboarding is becoming increasingly complex, with financial institutions spending excessive amounts of time and money manually processing checks. 

Know Your Customer (KYC) is a process by which banks or other financial entities acquire information about their customers and verify the validity of that data by checking it against enormous external watch lists and public record databases. Anti-Money Laundering (AML) and Customer Due Diligence (CDD) are also critical processes that fall under KYC and consist of regular checks and ongoing monitoring of clients.

The objective is to examine the risk of potential illegal activities, and to curb misuse of the businesses’ services by way of identity-theft, money-laundering, terrorism-funding, and fraudulent financial transactions.

How do you automate a KYC process?

So how can your KYC process be conducted accurately, efficiently, and without adding extra weight to your team’s workload?

With KYC costs on the peak, there is internal pressure for financial institutions to reduce the burden of compliance. As a result, banks are looking forward to technological solutions that can automate these workflows and mitigate the weight that onboarding compliance carries.

 KYC Automation verification leverages advanced AI and machine learning technologies to ensure that your clients meet regulatory standards without a high dependency on internal resources. 

Though end-to-end KYC processing still requires humans to make high-level decisions, a majority of the legwork can be handed off to automation, and more specifically, Intelligent Process Automation. 

Intelligent Process Automation (IPA) is the collection of technologies that combine to manage, automate and integrate digital processes. Some of the technologies that make up IPA are:

Robotic Process Automation (RPA) – The use of robots that can replicate humans’ behaviour to manage high-volume, repetitive tasks.

Intelligent Document Processing (IDP) – A type of IPA that uses technologies such as machine learning, Natural Language Processing (NLP) and Intelligent Character Recognition (ICR) to process and extract data from a large quantity of documents.

Artificial Intelligence (AI) – AI analyses data in a way that humans can’t, and recognises patterns in data and learning from past decisions to make increasingly intelligent choices.

These technologies are now being used to automate workflows, extract data from documents and reduce screening, identification and verification times.

AI, implemented to workflow automation of KYC/AML processes can significantly lower efforts and costs.

Using IPA and machine learning to gather and analyse data can provide financial institutions with a more vigorous and instantaneous picture of any client. This has many short-term and long-term benefits.

How AI Automation is transforming KYC?

Reduced Costs

Automating online KYC processes can reduce onboarding costs by 70%. By eliminating data-entry error and rectification, avoiding hefty non-compliance fines and increasing the onboarding cycle, banks can reduce costs significantly.

Increased Efficiency

Fully automated identity verification enables customers to create a verified digital identity that can be checked instantaneously. And since robots don’t need to rest, automated solutions also have the added benefit of running 24/7 with no down-time.

This saves up to 80% off of onboarding time and allows financial institutions to increase their total number of onboarded clients per annum.

Minimised Risk

By automating end-to-end processes, you can minimise the risk of errors caused by data entry mistakes or oversights. The reduction in manual intervention also significantly reduces security threats and data breaches, keeping customers’ data safe and keeping banks compliant.

Scalability

Manual practices are impossible to scale without large costs in manpower and do not easily adapt to the frequent changes in KYC regulations, internal changes or external threats. 

AI-powered bots run 24/7. Automatic KYC Verification process using chat can adapt to external requirements quickly and can be integrated into your business’ infrastructure with little to no interference or downtime.

Improved Customer Experience

Customer satisfaction is the key to success. KYC Automation provides clients with a frictionless experience by eliminating the frequent back-and-forths between customer and bank when new information is required. With an automated process, customers are given an easy and fast accreditation or identification experience that results in quicker account opening.

Freed-Up Capacity

Eliminating the need for employees to perform repetitive tasks means they can spend their time focusing on more high-risk cases and customer-centric activities.

Empowering employees to use their talents and creative abilities on higher-value tasks increases employee engagement and retention. According to a 2019 study conducted by Forbes, of 302 senior executives surveyed, 92% said that employee satisfaction had risen as a result of intelligent automation initiatives.

'AI, when applied to workflow automation of KYC/AML processes can minimise the duration of control processes, minimize human errors and significantly reduce costs. ' 

Despite cynicism, AI need not replace human interventions but can augment human intellect.