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5 Easy Steps to Improve Your KYC Process

The latest industry news, interviews, technologies, and resources.
Apr 30, 2020
5 min read

A KYC process is not something that’s set in stone. It’s an ever-changing, always-evolving project that will always need fine-tuning and adjustments. Today, we’ll give 5 easy steps you can take in order to improve your KYC process. 

Create Audit Trails

Audit trails are a fairly simple concept but their value to the KYC process is immeasurable. An audit trail documents, records, and chronicles each and every step of the KYC process. From profile creation to monitoring and editing, the audit trail clearly maps the sequence of activities undertaken by the company, emphasizing the principles and values of transparency and clarity. 

Audit trails are not only valuable as a culture builder, but they are a tremendous tool when evaluating the quality of work that’s been done. Internally, it gives management clear insight into the steps undertaken by staff when dealing with an entity but the real merit of the trail comes when external regulators run their checks on the company. The audit trail is the single most important piece of evidence that the KYC policy has been executed according to the policies, guidelines, and requirements of the regulator. 

Failure to adhere to KYC regulation can undo months or even years of hard work for the company. Fines, financial but importantly reputational damage can prove detrimental to the progress of an organization that falls short of the proper KYC procedures. An audit trail is not a suggestion or something that ‘would be nice to have’. It’s a necessity and priority that can prove to be critical for the company’s future. 

Cloud-Based API Technology

The idea here is simple. Monitoring the news, feeding the in-house compliance workflow with industry-leading data and information and getting instant updates about new compliance regulations is a huge undertaking in its self. Instead of using your in-house resources to go hunt for this information, you can simply leverage cloud-based API technology. 

The KYC process instantly becomes faster, streamlined and more accurate, allowing compliance analysts to make informed risk decisions. Their skills can be used in analyzing the information, drawing inferences and conclusions instead of burning out, manually looking for information. 

Tailored Approach 

One of the most important steps in bettering your KYC process is understanding the intricacies of your own vertical, product and geography of conducting business. Even though there are best practices for conducting KYC that apply to every single company, in every single market, if you want to get serious about your KYC process, you need to dig dip into the identity and uniqueness of your industry.

What’s the financial and regulatory environment in the jurisdictions you’re selling? What’s the customer persona? Are you a B2B or a B2C company? Are you dealing with clients that possess a complex layer of ownership structure?

Answering questions in the same vein as the examples given above can essentially shape the way you approach and tackle your KYC process. Even though the end-goal of every KYC process is the same, the means by which you go about achieving that differ greatly when you drill down to details.

Employee Training 

We can’t stress this enough but the compliance industry is one of the rapidly evolving sectors in business. Reaching out to technology solutions in order to catch up is one way to go about it but you must never forget the most important asset your company possesses: people. 

Being a compliance analyst is similar to being a doctor or a software developer in the sense that you never stop learning. A degree and some years of experience mean nothing if you stop evolving and learning the new trends that unfold in your sector. Investing in employee training is investing in your company. 

The benefits are tremendous as not only will employees be upgrading their skill set but they will also feel an increased sense of motivation and value. When your employer allocates the time and resources to train you, you feel important and valuable, renewing your incentive to show up to work and do your best. 

Internal Assessment 

Once in a while, it’s good to take the time for some reflecting, do some cleaning up of our mess and evaluate our own performance. The same logic applies to companies. It’s important to establish a framework of governance and management where departments are assessed on goals, results, and performance. 

Even though this happens for the most part for revenue-generating departments like sales and marketing, this is often not the case with compliance. For the longest time, KYC was seen as something companies had to do rather than want to do. In recent years though, the perception seems to be changing and companies are more educated on the importance of a healthy, high-functioning KYC department. 

Implementing an internal assessment system will only help the department perform better and subsequently push the company to greater heights.

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