Simplifying KYC to make client relationship smoother

11/10/2021

For both individual and corporate customers, KYC (“Know Your Customer”) procedures are among the main friction points in the client journey. These steps, which are required by regulators, are necessary to combat fraud, money laundering and terrorist financing. However, there is still much room for improvement: that is the job of the “KYC Transformation” teams at Societe Generale.

KYC procedures are systematically carried out at the very beginning of the relationship between the bank and its clients, for example when the account is opened. Nevertheless, the bank’s obligation to keep this information up to date makes it a recurring step in the client journey for both individuals and companies.

Traditionally, these checks on identity, income and beneficial owners were carried out by mail or in local branches, but digitalisation has simplified the process... though not without creating new difficulties.

 

Clarifying and harmonising procedures

Among the most frequent complaints from customers about KYC procedures are the intrusive nature of the information requested, the often large number of documents required, and a lack of fluidity in data transmission and processing. This is without even mentioning the security issues when some sensitive information - such as a copy of a passport - is transmitted via a simple e-mail.

Societe Generale has long worked to clarify the rules and harmonise procedures, with the introduction of a common base and uniform standards for all countries where the Group is active. These modular tools are designed to be continuously improved and to evolve according to the expectations of customers and regulators in each market.

And our improvements in identity verification do not stop there. We are also working to automate all or part of the collection and verification procedures, while keeping in mind that automated systems will never be able to do everything for all customers: human analysts will always be required to assess the most complex situations.

 

Automating and reusing as much as possible

 

“ Automation is a key lever for increasing customer satisfaction, as well as operational efficiency. One of the challenges is to automate collection as part of a multi-channel journey, with smooth, transparent and instantaneous data processing. ”

Automating this process also requires to be able to “reuse” existing resources, for example by identifying information already available within the bank or accessible externally, so that customers do not have to provide it again.
Sharing data that is already available internally is more complex than it seems, requiring the appropriate legal framework in order to comply with regulations and protect personal data, as well as the right technical platforms for sharing data and documents.

Regarding external data, depending on the country, public or private databases are accessible, in particular for companies (trade registers, beneficial owner registers, etc.). Developing automatic connections with these sources makes life easier for customers and reduces the risk of error.

Once the documents have been collected, document recognition tools capable of identifying and extracting the relevant data are becoming more and more powerful and allow for automated KYC document checks. Similarly, increasingly sophisticated anti-fraud solutions prevent attempts at identity theft through the misuse of documents whose scans have been stolen.

 

Developing information sharing and collaboration

For multi-bank customers, another challenge is to avoid providing the same information to each banking group several times.

To this end, initiatives are being developed to share information between banks, such as the SWIFT KYC Registry or Clipeum, a consortium in which Societe Generale is a member. Clipeum allows large companies that work with multiple banks to centralise and share information with their banks on demand, when necessary.

Collaboration between banking institutions to develop common tools is also a solution to limit the risks of piracy and fraud: with a single hosting and sharing platform to consolidate key information, document exchanges are fewer and more secure.

This information sharing - in compliance with the law and in full transparency with the customer - is one of the most promising avenues for further simplifying customer journeys and KYC procedures in the years to come.