Technology will help banking institutions to address complex compliance obligations.
FREMONT, CA: In the ever-transforming regulatory landscape, addressing the compliance requirements and managing regulatory risks have added to the woes of banking institutions. There is a dire need for banks to improve the quality of their data so that they do not miss any of the compliance obligations, especially the ones concerning know your customer (KYC). KYC processing is getting constantly complex for banking institutions. The strict repercussions linked with KYC have led the banks to seek out alternatives that are affordable as well as effective. Recent technological advancements promise just the right set of means for the banks to ensure KYC compliance.
Banking institutions can leverage bot-driven RPA, thereby minimizing the resource needed across the various aspects of KYC processing like data extraction, identification and verifications, and risk rating. Banks can also use analytics-based KYC processing that will aid them with the risk assessment procedures. Analytics-based KYC will further encourage insight-driven reporting to increase decision-making capability. When it comes to risk assessments and sharing KYC data across the firms, there is hardly any solution that can match blockchain-driven KYC processing.
Machine learning (ML) can also add value to KYC processing by tracking patterns and resolutions. Further, banks can extract structured as well as unstructured data with the precision of up to 90 percent. Such a capability will ensure an increased Straight Through Processing (STP) in KYC processing without the need for manual intervention.
Despite the above technological innovations, some of the banking institutions are hesitant in adopting the technology. While many of the banks are inherently fearful of data privacy and compliance requirements, they understand the role of technology in KYC processing capabilities.
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