According to David Schneider of onboarding software company ComplyCube, “Doing KYC by hand takes too long, uses too much paper, and is easy to mess up. Many companies view following the rules as a chore, rather than important.”
There is enormous pressure on banks to explore innovative technology that is easier to comply with regulations. They need fast and hassle-free tools for setting new customers up fast.
Custom onboarding automation is one such tool. Online enrolment and account opening are made more effective with the use of custom onboarding automation software, which combines processes and artificial intelligence.
When applied properly, this assists companies in complying with global KYC laws and preventing financial crimes.
This article discusses its use for fixing manual tasks and integrating all compliance work into one place.
KYC Compliance Requirements
All financial institutions are governed by Know Your Customer regulations applicable in a country. They keep illegal money from entering or seeping into the economy.
The mandates include obtaining names, jobs, addresses, and photostats of the identity of both old and new customers.
Customized onboarding automation software enables one to manage KYC policies without hassle through:
- Automatic checks like no blank fields in application forms according to the custom onboarding policy.
- Utilizing machine learning-based real-time ID file scanning and facilitating in meeting the demand of regulatory compliance
- Customized rules engine to fine-tune needs on data from each customer’s risk profile.
- Send an alert if any existing client profile has missing information for the fields pertaining to the current requirement.
The Manual Onboarding Process
Most financial companies have adopted the old way of joining new customers’ joining. This onboarding through customs is both time-consuming and very laborious to handle. Firms use custom onboarding automation software instead.
The best customer onboarding automatically makes all processes happen in such a way that all the time one spends to complete the membership process is much reduced.
Research in 2024 is evidencing that processing automated onboarding can be reduced by up to 85%, thus further increasing the efficiency of financial companies.
Bonus: Make your custom onboarding process better and comply with the help of our financing website’s recommended automation solutions.
Common Challenges of Manual Onboarding
Manual onboarding resulted in several problems for banks. Employees make mistakes while recording the details in some of the required documents.
The key documents will sometimes get lost while mailing them. It was hard to enforce a uniform Customer onboarding process and rules among employees.
Options for custom onboarding tools were also a challenge. Automated solutions for custom onboarding can now help to avoid such problems.
These apply forms online and in the digital storage of documents. Recent research studies assert that they reduce onboarding errors by as much as 30%.
Benefits of Automating the Onboarding
Here are some benefits that banks gain through tools like the best customer onboarding software:
- Reduced processing times so that staff can spend more time on higher-value activities.
- Smoothened the customized process of onboarding with uniformity in all branches.
- Central risk management, all new accounts digitally verified
- Actionable intelligence through automated analysis of client onboarding activities.
Streamline Data Collection
Different departments used to collect their pieces of new customer data separately. It was a redundant work.
It is also difficult to collate that dispersed data later on. In the current scenario, custom onboarding automation integrates data requirements.
This ensures that all the required fields are filled in a standardized way during the online opening of the account itself.
This makes it easier for compliance teams to access complete customer profiles, cutting onboarding time by 70%.
Standardize ID Verification
Manual ID checks in the onboarding process turn out to be flawed. AI-based customized onboarding automation, facial matching, and data scraping ensure IDs are read correctly.
This standardized procedure, as followed by the company’s policy, digitally verifies the identities of all the new signups in real time.
Firms save on the courier runs costs and remove potential risks of copied documents. AI-based ID verification reduces onboarding errors by as much as 80%, whereas speed and accuracy improved.
Automatic Monitoring of Accounts
Once created, accounts need to be monitored, too. Transactions will be monitored for anything out of the ordinary by an automated custom onboarding solution.
The staff no longer has to log into checking on any individual account. Any policy breach or outdated document will be reported directly to compliance teams. More than 90% of alerts are resolved within one working day.
Ensure Continued Compliance
It is challenging to follow the regulations when the criteria are constantly changing. The automated compliance checks of these tools ensure that there is no violation of the set custom onboarding policies even when the rules change.
Alerts about updates are sent out to the staff so processes can adjust in real time. Companies that implement automated compliance tools cut policy violation rates by as much as 30%. Therefore, this all-inclusive system will certainly never let compliance lapse.