Which initiatives should be prioritised?

Simplification of policies should present large opportunities for both efficiency and an improved customer experience.

Many onboarding policies have been written in a conservative way as an initial reaction to KYC and AML regulation. This approach reflected the environment of the time but lacks the nuance of a true risk-based approach. Policy simplification aims to empower desk analysts, asks the smallest number of intelligent questions of your clients and embraces a risk-based approach.

Replacement of manual tasks can enhance user capability, focus people on the most critical tasks and greatly improve case throughput.

People are still executing manual process steps in many areas of operations and compliance, includes tasks such as collecting information, reaching out to request client information or reviewing and removing false positive screening hits. There are many areas within onboarding / KYC / AML / client lifecycle that remain to be automated.

We believe organisations should seek to optimise the use of humans and machines, allowing each to focus on the tasks they are best at. We would recommend that you do not immediately aim to automate complex processes, but initially focus on automating the simplest, most repeatable tasks. Conversely, let people focus on the areas where they excel – such as complex decision-making. Ultimately, your aim here is to achieve a balance and get the best out of both your people and machines.

Digital customer channels offer an opportunity to improve your customer service and reshape the underlying operating model, driving both greater efficiency and enhanced compliance.

Increasingly, customers now expect to be able to provide information and interact through secure digital channels. Requesting information (such as KYC) or providing financial statements over email is no longer acceptable and is also inefficient from a operational standpoint. While this is not new to some areas of the financial services industry e.g. retail banking, digital channels are not yet ubiquitous across the landscape.

Building secure, online portals, mobile applications and providing a digital-first channel with customers is a huge change for many organisations who have operated through more traditional means up to this point. Aligning digital channels so they work seamlessly together as an overall system is a critical step.

Clean data structures are the foundation which will provide the ability for your institution to build out new and differentiated client solutions.

Enhancing and refining data will be a continual process, however there are often significant opportunities to drive efficiency and effectiveness through data consolidation and harmonisation. One example might be client data and documentation. Many organisations have multiple stores for this information for a plethora of historical reasons; potentially they operated as different siloed business lines within the organisation, or because a business has been merged with another, or because technology teams were aligned differently in the past. Whatever the reason, the underlying technology and data stores are different despite doing similar functions and holding similar information.

In transforming your data environment, there will be huge opportunities to improve your customer experience across the whole business and to simplify the technology, operations and compliance that support your middle-office functions.

Data will only reveal valuable and actionable insight if analytics are diligently applied to extract the signal from the noise.

One of the challenges we see consistently across operations and compliance is a lack of good analytics to support effective management decision-making. Often improvement initiatives are implemented to increase efficiency or speed, but with no clear baselines indicating how long processes take today, or how many steps and teams are involved. Equally, it is critical that decision makers are clear on what good looks like. Yet often the metrics are extremely difficult to generate and require significant manual effort to pull together. There is the potential to drive huge improvements through greater focus on ‘useful analytics’, which provide simple, critical information to business leaders in a real-time (or near to real-time) way.