Banks and financial institutions (FIs) are expected to conduct periodic reviews and refresh their customer information especially as regulatory scrutiny in relation to periodic reviews is increasing. At the same time Know-Your-Customer (KYC) periodic reviews are manual, time-consuming, voluminous and expensive.
Powered by technology, the Perpetual Know-Your-Customer (P-KYC) approach enables automation across all end-to-end periodic KYC review process steps, leaving only a small subset of the more complex cases that require some degree of human intervention.
With P-KYC, each step of the process can be automated and assisted by a wide variety of technology solutions, essentially reducing all the manual work that is currently being performed by analysts. A topline summary of the technology applied across the process, and the vendors who provide those services, are shown below.
| 1 | Lack of a single end-to-end solution There is currently no single vendor that provides all the required capabilities based on our industry observations. In order to avoid lengthy market scans and selection processes, it is important to have a trusted advisor with a deep understanding of the required KYC technology solutions available in the market. |
| 2 | Lack of project management/coordination As P-KYC requires a combination of different technology solutions, strong central management and solution expertise is crucial for a smooth and effective implementation of multiple solutions. A lead party having strong collaborative partnership with members of the consortium, consisting of bank stakeholders and multiple vendors, ensures effective and open communication that is necessary to achieve the desired outcome and management of dependencies between systems. |
| 3 | Policy changes and accounting new risks approaches Policy changes and new risk approaches may also be required. As technology is used to discount screening hits and identify material changes that mandate trigger-based review, banks need to review their policies and reassess their risk appetite to ensure all potential lapses are addressed, which requires in depth KYC domain expertise. |
| 4 | Transiting from existing protocols By adopting P-KYC, changes in existing protocols would be inevitable. A strong and structured change management program is critical in successfully introducing and educating employees to P-KYC and ensuring what role they have to play going forward. As employees become more familiar with its features and functionalities, they would be able to transit from the laborious KYC processes to the new system, focused on higher risk factors. |
P-KYC requires different technology solutions to be brought together in order to unlock the full potential of P-KYC. At PwC we have invested significant time and effort understand the vendor market in depth and understand which of these solutions have the relevant capabilities and can be seamlessly assembled into an integrated solution (e.g. as pre-built connectors already exist). The right choice of vendor(s) can be the difference between successfully achieving P-KYC or not. Reach out to us to find out more on how we can support you in your P-KYC transformation journey.
