By Emily Cordery, Director, Aston Carter Consulting
Whether you are new to managing Know your Customer (KYC) remediation programmes, have some experience in KYC but none in programme planning or you’re moving from one area of compliance to another, these tips will ensure you have a strong start.
Know Your Customer or KYC Remediation is a process that involves screening, verifying and identifying customers to ensure you know who you are doing business with. KYC ensures you assess the risks of any customer who could be involved in financial crime.
No doubt you are focussed on the critical remediation deadline date mandated to you, but what about the number of customer records you need to remediate and what type of customers are you remediating?
All too often this can be unclear. Clients often give us vague numbers in the hundreds or thousands of all customer entities, but few can see the full extent of the work they are about to undertake.
Having clear visibility of how many customer records you need to remediate and what type of customers you are dealing with is critical to understanding how long your remediation effort will take and what kind of workforce you need to undertake it. Understanding complexity of the remediation will impact your process and ultimately your timelines. Is customer due diligence (CDD) or enhanced due diligence (EDD) required? Is it a remediation or a refresh? Is there a backlog to contend with? These are all key components to solid forecasting.
A time in motion study will help you forecast the remediation effort required and allow you to accurately predict how and when you will hit your regulatory deadline.
Forecasting complete, it’s time to plan the remediation workflow.
Process is critical to any successful remediation. Many of our clients have legacy systems and processes that can create inefficiency. Regulatory deadlines and potential fines add to the pressure to get it right first time. This means process issues can be a disaster.
Mapping your end-to-end process and communicating it to all stakeholders in the front and back office is critical. All roles and responsibilities should be defined, SLA’s agreed and an escalation path put in place and communicated to all.
Anyone who is new to the end-to-end process should be trained and upskilled.
Forecasting done, process mapped, communicated and trained, what next?
People should be at the heart of everything you do – from customers who require remediation, to Remediation Analysts handling the cases and making the assessments; from Relationship Managers who gather client data, to Audit Teams who ensure compliance. Every single part of the process involves people. And they are usually spread across multiple departments, locations and jurisdictions, all with the best intentions but with their own day jobs.
Your customer won’t always respond. Your Relationship Managers will always have other customers to deal with. Audit Teams are mandated to be the first line of defence. Remediation Analysts are targeted to remediate as many customers as possible. Everyone has competing priorities, yet everyone wants the same outcome. People engagement, communication and empathy are key.
Don’t forget the human element in all of this.
In order to ensure the successful outcome of a KYC remediation follow these three tips: forecast accurately and plan effectively; implement and communicate an efficient process to your stakeholders; and remember to keep people at the heart of everything you do.
For more information about planning for a KYC remediation, please contact Emily Cordery, Director of Aston Carter Consulting at firstname.lastname@example.org or visit our website www.astoncarter.co.uk/consultancy-services.