How to Achieve KYC Compliance?

Capital Markets CIO Outlook | Friday, June 26, 2020

While stringent KYC regulations take form every now and then, capital market firms are orienting towards technology to attain compliance.

FREMONT, CA: With the ever-changing regulatory landscape, meeting the compliance requirements and managing regulatory risk have further added to the woes of capital market firms and other financial institutions. There is a dire need for companies to improve the quality of their data so that they do not miss out on any of the compliance regulations, especially pertaining to know your customer (KYC). KYC processing is getting increasingly complex for financial institutions. The strict repercussions associated with KYC have led the firms to evaluate alternatives that are affordable as well as risk-aversive. Recent technological advancements offer just the right set of means for the firms to ensure KYC compliance.

Financial institutions can leverage bot-based RPA, thereby reducing the resource needed across the various aspects of KYC processing such as identification and verifications, data extraction, and risk rating. KYC Companies can also use analytics-based KYC processing that will help them with the risk assessment process. Analytics-based KYC will further trigger insight-driven reporting to enhance decision-making capability. When it comes to sharing KYC data and risk assessments across the firms, there is hardly any match for blockchain-based KYC processing.

Machine learning (ML) can also contribute to KYC processing by identifying patterns and resolutions. Further, firms can extract structured as well as unstructured data with an accuracy of up to 90 percent. Such a capability will result in increased Straight Through Processing (STP) in KYC processing without manual intervention. 

Despite the above technological advancements, some of the financial institutions are hesitant in adopting innovations. While many of the firms are inherently fearful of data privacy and compliance concerns, they understand the essence of technology in KYC processing capabilities.

See also: Top Machine Learning Technology Companies

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