Transforming a major North American FI's KYC program to deliver better customer experiences

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  • Case Study
  • 6 minute read

Managed services case study

Industry: Financial Services
Today's issue:
 CP&FC
Country:
 Canada


Introduction

A large North American financial institution with operations around the world was under increased pressure to reimagine how it performed know-your-customer (KYC) activities such as identity verification, KYC due diligence and customer onboarding. 

We had numerous discussions with the client around leading and sound KYC operations industry practices. This led to a series of projects to enhance its operations, including the piloting of a hybrid delivery model for various aspects of its KYC program. In tandem with this pilot, we provided advisory support to help the organization streamline its KYC operations to reduce operating costs, strengthen the business case for change and channel savings into ongoing transformation activities.

The successful completion of these projects led the financial institution to engage us to provide KYC managed services that went well beyond traditional outsourcing.

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Challenge

After an internal review, our client recognized that it needed to overhaul its KYC operating and delivery model. Under its legacy model, the organization faced typical industry challenges, such as eroding work quality, lagging productivity, and lengthy timelines to onboard new customers.

This left its front office reliant on late and inaccurate files, which diminished customers’ experiences with the organization. It also burdened the organization’s management team with operational demands such as additional quality control reviews and contractor oversight—hindering its ability to focus on strategy and customer services. New leadership in the organization’s customer services function sparked an end-to-end rethink of its KYC operations. It set clear objectives: simplify the delivery model, improve the pace and quality of outputs, manage costs and enhance customer experiences. We responded with industry-leading perspectives, drawn from our experience working with financial institutions around the world, on how people, processes and technology can work together to deliver KYC solutions. We tailored these insights to our client’s unique situation, helping to shape a new operating and delivery model.

How can a financial institution improve its KYC operations to produce quality outputs, manage costs and enhance effectiveness, efficiencies, and the customer experience?


Approach

After learning about this financial institution’s challenges, our financial crime solutions practice shared lessons learned from our work providing KYC managed services to other global financial institutions. These discussions, and the trusted relationship we built with this organization, led to a three-month discovery review that assessed the current state of the organization’s KYC operations and pinpointed opportunities for people, process and technology improvements. 

We demonstrated our extensive experience in managing and improving KYC operations during the discovery review through recommendations tailored to this financial institution’s specific quality, productivity and customer experience challenges.  

We recommended a hybrid delivery model to improve the effectiveness and efficiency of the organization’s KYC operations. This combined onshore resources from our onshore Acceleration Centre, offshore resources from our offshore Financial Crime Operations Center of Excellence and a dedicated multidisciplinary advisory team to identify and implement related process improvements. 

We started with a pilot project that demonstrated the differentiated benefits of this multi-pronged approach to KYC managed services. Our high-quality onshore and offshore delivery resources upskilled faster and produced greater throughput at a higher quality compared to the organization’s existing third-party provider. And our advisory capabilities pinpointed opportunities to sustainably improve both the organization’s processes and broader operating model. The customer services function moved to a lower-cost model that starkly contrasted to its current state, despite using seemingly higher-cost resources. 

The pilot gave the financial institution confidence to share more work with us and ask for a proposal to take on most of the function’s activities, including customer refresh, new to bank and quality control, in addition to a transition strategy. This led to a multiyear managed services agreement that saw the organization transition KYC operations from its existing internal resources, independent contractors and third-party provider to our hybrid team.


Impact

Together, these teams implemented a 24x5 delivery model that continuously moved KYC files forward through to completion, effectively and efficiently meeting the needs of the organization’s team members around the world. This created a more positive, efficient and valued experience for both the organization’s internal staff and its customers.

The financial institution also streamlined its KYC management activities. Its leadership team interacts directly with our onshore project leadership. This means they work with people they know and trust on the front end while accessing back-end resources from across our global network who help them as needs arise.  

By rethinking how it operates, delivers and oversees its programs, this financial institution can better manage its operations and costs, continue to improve its client experiences and apply lessons learned over time. It’s also adopted a strong framework it can use as a foundation for improving other functions within the organization.

By redesigning its KYC operations and associated processes, the financial institution reduced its operating costs by approximately 20 percent—savings that let it move forward with additional transformation activities despite the challenging economic climate.

Key success factors

  • A dynamic, scalable managed service solution and delivery model: We provided a unique hybrid of local and offshore resources through our onshore Acceleration Centre and our offshore Financial Crime Operations Center of Excellence to provide 24x5 coverage of files. This solution was scaled up quickly as the organization’s needs changed.
  • Dedicated operations and advisory teams: A hybrid operations team, combined with multidisciplinary advisory capabilities that included financial crime solutions and operations, generated high-quality KYC services and sustained improvements to the organization’s KYC operations. 
  • A human-led, tech-powered approach: Focusing on existing challenges, while also looking for new ways to make additional improvements and a bigger impact through people, processes and technology, helped the organization accelerate its ambitions and close capabilities gaps.
  • A focus on sustained business outcomes: Pinpointing goals, milestones and measurable performance indicators at each step helped the organization achieve its desired results and realize additional efficiencies and value over time.

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Michael Reystone

Michael Reystone

Partner, National Financial Crime Practice Leader and Financial Crime Managed Services Leader, PwC Canada

Tel: +1 416 869 2349

Sajith Nair

Sajith Nair

Managed Services Leader, PwC Canada

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