Speed up AML compliance with enhanced customer onboarding

Tapan Shah, Ralph D. Wright
Speed up AML compliance with enhanced customer onboarding

Give your customers the experience they want and your compliance teams the information they need by integrating AML into customer onboarding.

Financial services companies face intense competition, and their customers demand fast, smooth, flexible experiences.

To effectively compete in the market and meet customers’ expectations, business lines at many financial services companies are onboarding customers and opening accounts at increasingly quicker paces. Any slowdown might be enough to send current or prospective customers elsewhere.

However, companies also need to gather the necessary information for customer due diligence (CDD) and Bank Secrecy Act/anti-money laundering (BSA/AML) compliance teams to meet regulatory requirements. If compliance teams can’t effectively gather the information necessary for their know-your-customer (KYC) program, they risk regulatory action.

So, how can financial services companies deliver the speedy, seamless experience that customers demand without creating unacceptable regulatory risks or unsustainable burdens for BSA/AML compliance teams?

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A few simple questions during onboarding can accelerate AML compliance.

Many organizations are implementing technology platforms such as SalesforceTM to support customer onboarding for the effortless, speedy experience that customers demand. As part of this technology enablement process, organizations should consider the AML requirements they must satisfy.

By integrating BSA/AML compliance into customer onboarding, organizations can make onboarding seamless for their customers, gather essential information from an AML compliance standpoint, and make the necessary information available to the AML compliance team for review and approval.

Such an integration doesn’t require a complete overhaul of the onboarding program. Instead, organizations can insert a focused selection of questions for CDD and risk rating into their current onboarding process.

An effective AML compliance integration  should be targeted, seamless, and adaptable

An effective AML compliance integration into customer onboarding should be:

  • Targeted. Creating an AML-enhanced onboarding process requires the AML expertise to build in the right compliance questions in the right quantity. Too many questions can tax customers’ patience, while too few questions or the wrong questions could leave AML compliance teams with not enough information.
  • Seamless. The information gathered should help build a detailed, definitive profile of the customer. If the additional onboarding questions contribute to duplicate information or don’t transfer to different areas of the company, the customer could receive the same questions repeatedly or become frustrated when the organization can’t sort out which customer information is accurate and up to date.
  • Adaptable. Any AML integration will need updates as the organization grows, launches new products, and pursues new strategies. To expedite these updates and avoid future burdens for compliance and IT teams, organizations should create a library of additional AML questions that can be easily added to the system without initiating another project.

AML-enhanced onboarding delivers organizationwide benefits and a better customer experience.

AML-enhanced onboarding delivers organizationwide benefits and a better customer experience.

With the right selection of BSA/AML compliance questions built into the onboarding process, everyone involved benefits:

  • Customers can get their accounts up and running fast. The addition of targeted AML questions into the onboarding process means new customers don’t have to deal with additional slowdowns or redundant compliance questions as they perform transactions and reach different touchpoints within the organization.
  • First-line relationship managers can make quick, highly informed decisions and capitalize on available opportunities while remaining confident that AML compliance teams can satisfy the organization’s regulatory and program requirements.
  • Second-line AML compliance specialists get a head start on customer due diligence with a rich set of data, and they can use the information gathered to relay additional compliance insights. These insights could help the first line make decisions about new offerings and new avenues for customer acquisition, such as fintech partnerships.

The value of AML-enhanced onboarding goes further than regulatory compliance. Accessing financial services is becoming an increasingly digital process for most customers, and the COVID-19 pandemic only accelerated this trend. Customers want to open accounts online, manage their accounts and transactions through mobile apps, and communicate with their financial services provider exclusively through digital channels.

An enhanced digital onboarding process can help the organization build a comprehensive, up-to-date profile of each customer, regardless of which interaction channels the customer uses. This detailed picture can describe for the business line who customers are, what needs they have, and how the company can best serve them now and in the future.

AML-enhanced onboarding helps create a complete customer picture.

AML-enhanced onboarding helps create a complete customer picture - The value of AML-enhanced onboarding goes further than regulatory compliance

An onboarding revolution represents just one step in any organization’s digital transformation journey. A larger challenge facing banks and other financial services companies involves applying all the organization’s various technology systems and data sources to produce a single, coherent, up-to-date view of the customer. Reaching this goal requires solving a wide range of logistical challenges, technology problems, and data quality issues.

For example, financial services companies that execute a merger or acquisition might need to unify various onboarding and customer relationship management systems within different areas of each organization. Both from a compliance efficiency standpoint and a customer experience perspective, the organization should be able to know and validate information about each customer without having to ask the same questions repeatedly or route the customer through a maze of different departments.

When systems work together to build a definitive and detailed profile of each customer, that picture informs and empowers the customer-centric mindset that serves as the foundation of any successful transformation.

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Tapan Shah
Principal, Financial Services Consulting
Ralph D. Wright
Principal, Financial Services Consulting