KYC’s future: Thriving amidst banking’s evolving challenges.

According to a recent report by Fenergo, the cost and duration of Know Your Customer (KYC) reviews have increased in the past year. The report found that the average cost of a KYC review has risen by 17%, with banks now spending between $2,500 and $3,500 per KYC review. These rising costs are due to factors such as increasing regulatory complexity, multiple jurisdictions with different requirements, and delays in client responses. The report also highlights issues in transaction monitoring, such as high false positive rates, which can be caused by outdated legacy systems and a lack of integration between KYC, onboarding, and transaction monitoring systems. The report suggests that artificial intelligence (AI) and machine learning (ML) could improve transaction monitoring by allowing for more configurable rules and adaptability to geopolitical changes. The report also emphasizes the importance of client experience in the onboarding process, with nearly half of the banks surveyed admitting to losing clients due to slow onboarding processes. Suggestions for improving the onboarding process include centralized client data storage, digital channels, self-service options, and a single point of contact.