Fragmented information and uncertainty about requirements are common themes in how many people experience their Know Your Customer (KYC) processes. And you can't always trust what you find when you search or Google.
Here we present some of the challenges we see people struggle with when collecting company data.
1. The people who use the information have a limited understanding of data quality
It is not easy to judge the quality of vendors and data sources when the field is far removed from your own. Nor should everyone who uses the information be expected to have that knowledge. As with all data, there is room for interpretation here too. It is a major advantage when someone knows what to look for and what deserves weight in terms of relevance.
That makes ratings and automated quality assurance essential for avoiding as much human error as possible.
We are partners with the data and analytics company Bureau von Dijk and can offer their well-established, global PEP (politically exposed persons) risk rating alongside other risk information that we source directly ourselves.
Source: Bureau van Dijk
Read more from the expert at ZTL: Enin meets Andréas: Head of Anti Money Laundering and financial crime prevention
Enin also has its own custom company flags. They act as early warnings of risk or bankruptcy. They have been developed on the basis of customer requests and real cases where we have learned what actually matters.
Several of our flags can also point to significant opportunities. An investor may want few owners and short decision paths, while for a lender the same thing can represent a risk. Whether it is a risk or an opportunity, we have interpreted the data for you and help you get to know your customer better.
A flag or alert of this kind might look like this:
Among other things, the flags describe how different roles affect the risk level, and you can drill down into the details by clicking the blue links.
2. The process itself doesn't work, even when the information and systems do
Make sure you are deliberate about how your workflow looks and how it matches the system you are using. There is a lot to keep track of. What should you check first, and where do you start? This should be set out in an established, thorough procedure.
Here we show a high-level flow that we have developed together with our partner and provider of KYC onboarding systems Quesnay.
3. Uncertainty about what you can require from your vendors
It is often unclear what is reasonable to ask for and who actually holds responsibility. From your data provider you should be able to require:
- High data quality
- Simple integrations with your line-of-business systems
- A clear overview of what the provider does and does not have, and what you may need to source elsewhere
- A dedicated sparring partner who knows best practice, but understands that everyone has different needs and can adapt where possible and necessary
- A simple pricing structure and no unpleasant surprises along the way
Be clear about your organization's specific needs and tell your provider exactly what you require.
Be clear about your organization's specific needs, your requirements and what you need. Consider including it as part of a solution description in an appendix to the contract.
Choose a data provider with experience and up-to-date expertise.
It is not enough to have built a model once upon a time and then apply the same one to everybody for years on end. Needs change constantly, both because regulations change and because new services arrive that require a different approach to data collection and analysis. You may also need to extract data so you can run your own analyses.
Your partner in this field should have experience, an overview of the data that is available and, not least, be up to date.
At the same time they should offer a flexible solution that can be adapted to each customer's specific needs, with a focus on good interfaces for both machines and people.
4. Uncertainty about which data to collect from data providers and internally from the customer
In many cases this depends on what permissions your organization holds from the Norwegian Tax Administration. For information about private individuals the rules are different and stricter than for companies. Nor can you "borrow" a permission from a vendor.
Data has to be collected both internally and externally, and the key is to automate wherever possible.
Here is an example of the data that can go into a KYC check for a financing solution:
This is a general overview from Enin aimed at financing solutions; individual needs and statutory data will have to be collected in addition.
Read more about the data Kaja at Nordic Corporate Bank checks using Enin.
5. How do you gather data faster and with better quality?
In the end it comes down to the best possible data quality in the shortest possible time. So you can spend less time on Google and trust the information you find.
Collecting data is a big job. On top of that, the new integrations and systems you need put you at the back of the queue with the IT department.
Collecting data is a big job. On top of that, the new integrations and systems you need put you at the back of the queue with the IT department.
By bringing every source together into a single search process and having what matters presented to you, it becomes far easier to get the complete picture.
Being confident that you really know your customer can be difficult , but it is by no means impossible to systematize!
If you want to know more about KYC or AML data, we hope you will get in touch.
