Parallel surveys show differing perspectives of financial institutions and their corporate customers on the effect of financial firms’ spend of up to $500 million annually on KYC globally
The lack of sufficient people resources and the volume of regulatory change are top concerns among nearly 800 financial institutions who responded to an authoritative Thomson Reuters survey on the impact of global changes in Know Your Customer (KYC) regulation, while a parallel survey of their corporate customers found that 89 percent had not had a good KYC experience, and 13 percent had changed their financial institution relationship as a result.
The global surveys revealed a single clear message: the costs and complexity of KYC are rising, and are having a negative impact on their businesses. While financial firms’ average costs to meet their obligations are $60 million, some are spending up to $500 million on compliance with KYC and Customer Due Diligence (CDD).
Both financial firms and their corporate customers agreed that lengthening KYC procedures are putting more strain on on-boarding processes and client relationships, with the time to bring a new client on board – up 22 percent from last year — and anticipated to increase a further 18 percent over the next year. Furthermore, 30 percent of corporate respondents reported that times to on-board are more than two months and of which 10 percent claim an on-boarding time in excess of four months and that they have, on average, eight different bank interactions with the bank during the process.
KYC continues to weigh heavily on financial institutions, with the report citing that a lack of appropriately skilled people is their biggest concern and half of all respondents stated that the number of employees working on KYC had increased over the past year. A majority also agreed that ongoing regulatory change is another top KYC challenge they face: 87 percent of banks and 75 percent of investment managers believe regulatory and legislative change is the most influential factor for their KYC processes.
Ever-changing regulations pose KYC challenges not only for financial institutions but also for their customers. Nearly 70 percent of financial institutions shared that they believe that all or most of their clients are proactive in reporting material changes in KYC status such as beneficial ownership change. However, approximately 30 percent of the corporate respondents reported that they keep their financial institutions up to date proactively.
A significant 69 percent of banks who responded said that the level of engagement with their organization by regulators had increased for KYC and CDD. Among the C-suite executives at financial organizations who responded, 70 percent said they had been spending more time and attention to KYC changes over the past 12 months.
“A positive and efficient client on-boarding experience is a differentiator for those financial institutions able to deliver it to their clients,” said Steve Pulley, global managing director – Risk Managed Services at Thomson Reuters. “Our survey results highlight the disconnect in perception between banks and their corporate clients, demonstrating that most financial institutions have further to travel on this journey. Industry managed services in the KYC and client on-boarding space, such as Thomson Reuters Org ID, can play a key role in improving the client experience of being on-boarded and refreshed by significantly reducing the number of interactions they have with their banks and increasing the consistency of their experience, without compromising on compliance.”
The surveys — administered at the outset of 2016 to an evenly proportioned set of respondents in leading regional markets in Europe, the U.S., South Africa and Asia-Pacific — involved 772 respondents at financial institutions as well as 822 respondents at corporations, all engaged within their organizations in KYC-related compliance activities, encompassing processing of and adherence to client on-boarding and CDD.
For further information, or a copy of the Thomson Reuters 2016 KYC Challenges Surveys, please go to: bit.ly/2700bha (for financial institutions) and tmsnrt.rs/1Ts3t2E (for corporations).
Thomson Reuters Org ID, which recently celebrated its second anniversary, is a global solution developed for banks, investment managers and corporations to simplify and streamline CDD and the ongoing maintenance of KYC records – in line with ever-changing regulatory demands. Org ID has processed 125,000 KYC entity profiles, all of them fully validated and screened, with continuous monitoring and dynamic refresh offered as part of the service’s end-to-end solution.
The financial services industry has bestowed accolades upon Thomson Reuters Org ID; it recently received the Data Management Review Award 2015 for “Best KYC & Client On-Boarding Solution” – the second straight year Org ID has earned this recognition. Last October, Org ID also won the “Best Managed/ Support Service Provider of the Year” at the Operational Risk & Regulation Awards 2015 ceremony in New York. Earlier last year, peers voting for the 2015 FTF News Technology Innovation Awards selected Org ID to receive two FTF Excellence Awards — in the categories of ‘Best Operational Risk Management Solution’ and ‘Best AML/Anti-Fraud Solution’.
For more information about Thomson Reuters Org ID, go to: https://risk.thomsonreuters.com/products/thomson-reuters-org-id-kyc-managed-service
Original Article, HERE
The post Thomson Reuters 2016 Know Your Customer Surveys Reveal Escalating Costs and Complexity appeared first on Coin Stocks | Cryptocurrency Investments & News. The Future of Money..
The post Thomson Reuters 2016 Know Your Customer Surveys Reveal Escalating Costs and Complexity appeared first on bitcoinmining.shop.