Our CEO and Co-founder Russell E. Perry recently sat down for a conversation with Justin Fitzpatrick, CEO of DueDil to explore and examine the digitisation of regulatory compliance on the One World Identity podcast, State of Identity. The two CEOs considered questions ranging from “How has COVID accelerated the need for digitisation in the financial industry?” to, “What role do KYB solutions play in the future of the sector?”
While both organisations have been digital leaders long before the coronavirus crisis, there’s been a recent growth in adoption of digital KYB solutions that’s worthy of further exploration.
In this episode, Russell and Justin discuss the complexity at the center of compliance for financial organisations around the world. What are financial institutions to do when they need to balance acquiring new customers, tackling cross-border regulatory compliance and streamlining their digital onboarding processes - all while staying ahead of the competition?
Below we offer several highlights from the conversation, including how the industry is responding to escalating expectations and increasingly rigorous compliance requirements:
Your KYB processes are only as effective as the data behind them
Both Russell and Justin share the perspective that any effective KYB process relies on the “ease of access” to truthful company information.
Russell explains, “Aggregated access to data is not only critical for KYB, it's a fundamental competitive advantage as it fuels faster decision making while simplifying the burden of managing AML regulations and compliance at the same time.”
While KYB is lagging behind KYC, the market has the potential to evolve quickly
According to Russell Perry, “KYC is all about volumes whereas KYB is about understanding the entity and the people behind it. There is a trend now towards automation but there are only about 5% of financial institutions around the world that have a fully digital solution in place today.”
Justin highlighted the rapid consolidation in the market and how providers are coming together to fulfil customer needs and look to become a single source of truth for engagement for all things KYB, “We see the growing importance of the ecosystem within financial services. New players are looking to build platforms and leverage best-in-class technologies from different sources to supplement their core offerings. This will continue to happen and it will be interesting to see how the larger organisations respond to these propositions.”
Russell believes that the future of financial institutions will depend on embracing interoperability,
“It will be all about the network. There’s still a high level of fragmentation for different use cases in different parts of the customer lifecycle management. We now need to think about how different platforms work together and how we can leverage APIs to provider better, broader services.”
Periodic reviews aren’t enough: KYB needs to be perpetual
As regulations evolve and scrutiny intensifies, organisations can also find themselves in their own constant state of change. This combination adds additional strain on already static compliance related tasks.
“Entities can move, shift and change shape rapidly. From new officers, directorships and UBOs to address changes, keeping on top of these changes needs to be moved from periodic updates of data to perpetual monitoring.”
And with the right technology, perpetual reviews of your KYB information can be realised with relative ease. It’s all about choosing the right RegTech partner.
You can read more about what our CEO has to say about the essential importance of adopting perpetual KYB by reading this article in The FinTech Times.