• November 17, 2019

No industry is as rigorously regulated as banking and one of the most demanding areas of compliance for financial institutions is with the KYC requirements stemming from various anti-money laundering (AML) rules. While the vigilance of the financial system is an important weapon in the fight against global terrorism and organized crime, ensuring that vigilance has resulted in an evolving, increasingly complex panoply of rules that vary significantly by geography.

On average, financial institutions spend, according to Consult Hyperion, $60 million annually on KYC compliance, customer due diligence and client onboarding—the largest banks report spending up to $500 million a year. And those that don’t could be on the hook for even more. A report from client lifecycle management technology provider Fenergo found that, over the last ten years, various governments have levied AML- and KYC-related fines against banks totaling $26 billion. So, controlling the costs associated with KYC compliance is a primary concern for financial institutions and, increasingly, they are exploring robotic process automation (RPA) to make what is currently a heavily manual process more productive.

Onboarding and RPA

Typically, banks implement KYC procedures at two points in the customer management lifecycle: onboarding new customers and customer account maintenance.

In order to ensure that new customers and applicants are who they portray themselves to be, the various KYC requirements that exist in different federal, state and local regulatory regimes require that banks work diligently to establish a prospect’s true identity. This process traditionally has meant human workers manually collecting information on individuals and businesses—spending many hours scouring annual reports, company websites, third-party websites, industry registries, proxy statements and more to verify the legitimacy of businesses and the identities of their executives and/or officers. Many more hours are spent on the phone verifying the details unearthed by manual searches of those documents.


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