To comply with Know Your Customer (KYC) and Anti-money Laundering (AML) regulations, banks must confirm the identity of prospective clients before any business can be transacted.
The larger the prospect is and the more substantial the amount of business, the longer these individuals, financial, and organizational profile verifications can take. The longer the process takes, the greater the likelihood the prospect will choose a competitor.
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So, it’s no surprise large regional and global banks are walking a tightrope of risk when it comes to onboarding new customers. They can:
- Accelerate their onboarding process by cutting corners on the checklist of identity and suitability validations required to close the opportunity – and risk massive penalties and fines for non-compliance, as much as $1 billion for one bank in 2019
- Invest heavily in scaling up their compliance teams to speed the onboarding process without cutting corners – and introduce additional potentially hundreds of millions in expenses without the guarantee of top-line revenue growth
- Follow the identity and suitability validation protocols to the letter with the team and process you have—and risk losing the opportunity to a rival that can complete the process more quickly
Each of these three choices puts potentially billions of dollars at risk for the largest banks, and the stakes are increasing faster than most banks can manage