KYC remediation

The 4 key indicators of a successful KYC remediation campaign

KYC remediation

Knowing Your Customer (KYC) is at the heart of the challenges faced by regulated companies and financial institutions. In fact, they are subject to the European legislation to combat money laundering and the financing of terrorism (AML/CFT) and are obliged to carry out KYC checks. This involves collecting and checking information and associated supporting documents from the beginning of the relationship (identity, domicile, activity, etc.). These KYC operations also occur throughout the commercial relationship in the form of periodic reviews.

In the event of a breach discovered during an audit by a regulator, such as the ACPR (the French Prudential Supervisory Authority), companies face serious consequences such as criminal sanctions. They also risk damaging their brand image in the event of indirect involvement with a case of money laundering or fraud. Some organizations are also required to launch extensive KYC remediation campaigns aimed at making a substantial stock of existing customer records compliant, often before an imminent deadline. In such cases customers are asked and invited to update their file as soon as possible. These operations require special attention in order to maximise the remediation rate of these customers, while managing the associated investments and customer satisfaction.

In order to optimise the performance of a KYC remediation campaign, Guillaume Bru, Project Director at Webhelp KYC Services, recommends paying particular attention to 4 key indicators:

1/ After taking an inventory of the customers targeted by the campaign, ensure a maximum deliverability rate of the invitations in order to reach the largest number of customers.

The essential point is identifying which contact channels to prioritise according to the type of customer (email, post, SMS, telephone, etc.) and confirming having the means of contact used by each customer (email address, telephone numbers, postal address, secure messaging in the customer’s account, etc.). By having the option of using a variety of channels, you will increase your chances of reaching the customer with one of these methods. On the other hand, in order to control costs, prioritise mail only when necessary – for example, to customers less comfortable with digital channels or in the case of a final reminder.

2/ Once the customer is aware of the update request, the second indicator to be optimised is the take-up rate corresponding to the customers’ consent to the update of their file.

In fact, some customers complain about the constraints associated with these administrative formalities. Above all, it is necessary to prepare and use reasoned and personalised arguments, given by expert, trained members of staff. We have seen that 95% of customers agree to carry out the remediation following a well-reasoned call with one of our advisors. Also, rely on the official communication channels used by your company in its relationship with your customers (corporate website, customer support, etc.) in order to rule out any suspicion of phishing, for example.

3/ Customers must then be able to take action and provide whatever is required in order to obtain a maximum collection rate.

To do so, make it easier for them to cooperate and favour user-friendly digital channels, while leaving the door open to traditional channels such as post. You can also directly ask the customer what their preferred method is. Anticipate their questions and answer them if necessary. Offering support through a hotline or a chatbot is a good way to overcome any final obstacles they may face. Finally, in the event of a lack of response, send reminders with prompts, progressively and sufficiently spaced out to both control costs and preserve the customer relationship.

4/ Finally, the last key indicator to optimise is the compliance rate of the files collected.

Some files may be rejected due to incompleteness, illegible supporting documents or still being out of date. Raising the customer’s awareness beforehand of the required quality of the documents to be provided will help to avoid many rejections. Also, it is important to be pragmatic andadapt the level of the requests based on the assessed degree of AML/CFT risk. Analysing pre-existing information will also potentially reduce the number of items to be collected. Finally, in the event of a non-compliant file being received, set up a specific follow-up process to make the file compliant.

Define and prepare the campaign in advance by implementing a process that combines technology for automated tasks and people for high-value tasks. Throughout the remediation campaign, set goals, particularly for remediation rates that you will manage each week by optimizing these 4 key indicators. It is also wise to demonstrate flexibility by testing and adapting each element of the process in order to continuously improve results. This is the key to a successful KYC remediation campaign.

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KYC remediation

[Banking, Insurance, FinTech] KYC Remediation: how to outsource without sacrificing customer experience

KYC remediation

The purpose of KYC remediation procedures, which regulated establishments may be required to carry out, is to upgrade client data and to ensure that it is compliant. Faced with large amounts of data to process under tight deadlines, many companies choose outsourcing. But you need to be careful. KYC operations are delicate. They can have an unpleasant impact on end customers and thereby lead to the closure of customers’ accounts! However, as Nicolas Dambrine, Managing Director of Webhelp KYC Services explains, they are also an opportunity to get to know your customers better and even to boost their level of satisfaction.

KYC remediation refers to compliance operations that concern existing clients, in the context of KYC (Know Your Customer) regulations. It involves collecting, updating and checking customer data and the supporting documents, in particular, for identity, address and activity, as well as for tax. As a rule, with a regulated company (such as a bank, an insurance company, a payment institution or with FinTech), it follows:

  • Pressure from the Regulator (the Prudential Supervision Resolution Authority, or ACPR in France), requiring a particular group of customers to be brought into compliance, sometimes with the threat of a fine
  • The entry into force of new regulations which, to be complied with, require the database of existing customers to be updated
  • Receipt of a banking licence or the acquisition of a banking institution, meaning that the database of existing customers needs to be updated so as to ensure uniform adherence to regulatory procedures

For many financial institutions, these remediation obligations pose several challenges: how can you implement a large number of operations in a short time and in a reliable and traceable way? How can you maximise the data collection rate so as to avoid closing the accounts of customers that did not respond? Finally, how can you minimise the impact on customer experience and avoid tarnishing the image of your brand?
After all, we should remember that a remediation initiative is rarely a happy experience for the end customers. It may appear intrusive or be viewed as a form of phishing that could compromise the confidentiality of their personal data.

While outsourcing KYC remediation is a very suitable solution to address these issues, it is not something you can improvise! For Nicolas Dambrine, there are a few golden rules to follow when it comes to outsourcing a KYC remediation initiative:

  • Work out a methodology with accurate planning and topic-focused workshops, so you can prepare each stage of the project in advance and prevent technical, operational or human errors before the project gets under way.
  • Get the help of a project team with both the right size and experience over the whole course of the initiative. It is easy to underestimate the workload, so it is better to invest a little more at the outset to ensure the project is well managed.
  • Prioritise operational efficiency and process optimisation with an end-to-end solution combining technological and human elements. The truth is that although technology is transforming and accelerating the process of remote identification, no platform can claim to automate 100% of operations. Some complex procedures will require the involvement of teams of expert operators focused on value-added tasks and interaction with customers.
  • Set up a dedicated telephone helpline right at the start of the initiative, allowing the end customers to ask questions and to check if the operation is legitimate, or to get help with completing the remediation process. We found out that 95% per cent of customers who contact this hotline agree to carry out the remediation, which is thanks to the quality of the advice from our expert agents. So for your initiative, this is a great way to increase the rate of compliance! This communication channel is also an opportunity to improve your customer relations and to strengthen the bond with your end customer: by getting updates on their situation or on their contact details, or hearing them express their needs and their problems …
  • Establish accurate reporting and metrics beforehand, as they are essential for managing the project and achieving your objectives. They will enable you to monitor its progress and take decisions at the right time in the event of a change of course.

These five factors, if they are properly taken into account, are the keys to the success of an outsourced KYC remediation initiative.

When you make customer relations central to the whole operation, KYC remediation campaigns can give you an opportunity to improve the relationship with the end customer and to boost customer loyalty over the long-term, thanks to reassuring advice provided by experts.

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