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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