How To Improve Customer Experience Using KYC?

Organisations in the financial services industry use Know Your Customer (KYC) to assess customer risk and comply with legal and regulatory requirements. This is performed to satisfy Anti-Money Laundering (AML) norms and mitigate risks

The KYC process involves knowing and understanding customers’ identity, their financial activities, and the risk they can pose to the organisation. It often ends in a negative customer experience. The challenge for the companies that perform KYC is to comply with laws, reduce risk and cost, and at the same time, make the process delightful for customers.

KYC procedures for the financial service providers such as banks and insurance companies are still manual, time-consuming, cumbersome, and frustrating for most customers. However, the accelerated adoption of digital technology in the financial services sector is slowly transforming the customer experience with improved KYC experience and optimised compliance costs. 

We will examine how a financial service and other organisations that depend on KYC can improve the customer experience with regard to the KYC process.

KYC customer experience 

The manual KYC process is, arguably, one of the activities customers despise the most. For business clients, the emergence of online KYC (or eKYC, the digitised version of KYC) tools has helped avoid, to a great extent, the need for repeating the same paperwork multiple times. eKYC reduces the time taken for KYC verification from 7-20 days to minutes, cutting the wait time for a SIM card or loan processing by many days. However, the experience of individual customers mostly remains the same as they are often requested to show up in person for KYC verification and validation.

How to improve customer experience using KYC?

While the expectations of customer experience are skyrocketing across businesses, financial institutions need to examine the KYC process from the customer’s perspective. The process and interaction model must be revisited to optimise the customer experience.

At a high level, the following are the ways in which the customer experience can be enhanced during the KYC process:

  1. Adopting digital technology

In the last few years, digital technology has been replacing paperwork across industries globally. A wide range of tools available now enables the managers of the KYC process to shift the entire procedure online. Sadly, there still remain many institutions that have not embraced digitalisation in totality. 

Digital strategies such as process workflow, customer portals, integration with multiple communication channels, and virtually engaging KYC organisation and relationship managers can help substantially eliminate the painful experience customers go through in the KYC journey. 

How to do KYC online, is the question that financial services companies must address by implementing online KYC tools that can be accessed by the customer on any device, including smartphones. Emerging technologies (analytics, search, data visualisation, ML, and AI), by leveraging the power of data, allow banks to dynamically get more accurate information of their customers through automated alerts whenever customer KYC data changes. 

  1. Seamless onboarding experience

Any organisation that needs to go through the KYC process must work on flexible, faster, and seamless customer onboarding workflows. Along with the technology adoption, flexible product access can be allowed to customers depending on their risk profile.

Some tools allow banks to open savings accounts for almost all customers following a standard initial risk assessment, where the majority of the applicants will get full access to an account immediately. However, the tools designed on certain criteria can identify high-risk customers and flag them so that they will not have full access to their accounts until further KYC verification and validation have been completed. This process can make the majority of customers happy with the experience and only a very small number of prospective customers that are deemed risky will have to go through a more stringent KYC check.

  1. Consistent KYC approach

Given that the risk level differs between retail, SMEs, and enterprise customers, the organisations usually have widely different KYC approaches for each type. However, it should not be lost on the organisations that there’s a relationship between individuals and companies, so widely different KYC approaches and practices can lead to a negative experience.

Every transaction and every touchpoint with the customer provides more information about the relationships that an individual or business has with the organisation. The institutions need to capture this relationship-based data and interpret them to provide insights that can help in the fight against financial fraud and crime. With the technology tools that allow financial institutions to analyse internal data effectively, banks should ensure that all functions in the organisation have access to up-to-date information in a single customer view. 

  1. Continuous KYC 

Regular validation of customer information – known as cKYC (Continuous KYC) – can ensure that the bank and other financial institutions always have an up-to-date picture of their customer. Moving from periodic or one-time KYC checks to regular KYC can improve customer experience and productivity. By deploying a cKYC approach that updates customer data and information every time a change is detected through external transactions or activities with a bank, the digital tools can update those changes in the KYC system. A fully functional digital portal that the customer can access and update can lead to increased customer satisfaction and reduced KYC costs.

How can HyperVerge help you?

Our video KYC solution has been proven with the largest public sector bank in India. The solution has been curated considering every stakeholders’ interest, resulting in the best customer experience, the lowest video call duration and leading agent utilisation in the market.

C-KYC papers are often found to be varying in shape, format, and size. Our advanced AI methods can detect and classify cKYC documents like PAN, Aadhaar, and so on. This is all enabled within seconds at an enterprise scale with the highest-in-industry accuracy.

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