The Future of KYC, Single Customer View and Information Management

Jaroslaw Knapik

A single view of the customer is now frequently required for compliance, risk management, marketing, and sales and servicing purposes. However, this requirement is often handled separately within each business function. Given the fact that regulatory “know your customer” (KYC) requirements are mandatory, banks can leverage the investment to address broader customer information management demands.

This can drive the transformation of existing legacy assets into an interconnected solution in which customer data is reconciled across all data sources leveraging a common process. As a result, there is demand for a common KYC solution that can be implemented across the enterprise. This would allow resources to be shared among the sales and marketing, risk management, and compliance business units. The future KYC solution will reduce the total cost of owning and managing customer data, as well as keep that data updated and enable a single view of the customer.

This view of the customer’s relationship with the bank also means a single risk view of the same customer. It is therefore important for banks to create dynamic customer profiles that can be amended with every new event that affects the customer. This could be related to changes in credit profile, fraud risk, expected profitability, or propensity to sign up for the next best offer. The records must be stored in a customer information solution, which will resemble existing KYC systems, as they will require customer data capture and ongoing monitoring. Ovum expects banks to go through a long process of creating a single customer view, as well as a single risk view, which will lead to the merging of today’s KYC functionality with other systems that contain customer information.

The ideal solution requires a combination of people, processes, and technology. It starts with people taking control of the customer data belonging to their business. Data can only be trusted when there are people directly accountable for its accuracy, timeliness, and completeness. The solution also requires formalized processes to govern customer data through its entire lifecycle, from data entry through to validation, integration, maintenance, and end of life.

With stakeholders from the business and IT formally involved, and with processes in place for consistently managing customer data, organizations can then apply technology to automate and integrate that data, and to enforce business rules and policies throughout the lifecycle.

About Jaroslaw Knapik

Jaroslaw Knapik is a Senior Analyst within Ovum’s Financial Services Technology team. Jaroslaw specialises in the technologies used within retail and universal banks, as well as within wealth management institutions, with a particular focus on middle-office technologies, outsourcing trends and IT spending, market sizing, and investment trends across the Americas, EMEA and Asia-Pacific. During his time at Ovum Jaroslaw has authored numerous research and analysis studies on banking technology areas such as risk management, anti-financial crime, customer intelligence, financial planning, portfolio management and core systems on a global basis. He has also published reports on banking technology market developments in the US, and emerging markets in Eastern Europe and Asia-Pacific. Jaroslaw has worked closely with a number of leading US and European financial institutions on IT benchmarking and investment strategies. He has also used his expertise to produce bespoke market intelligence studies, create market sizing and forecasting models, and deliver keynote conference speeches. Jaroslaw has been quoted in the Wall Street Journal, Forbes, Bloomberg, American Banker, CIO Magazine, IT World, Bank Systems & Technology, Finextra and many others. Prior to joining Ovum/Datamonitor, Jaroslaw worked as research and business development manger at JR Electronics, Winspec Manufacturing and MA Laboratories. He was in charge of conducting research and business development in Central Europe and North America, introducing US-based companies to the European semiconductor markets and developing distribution channels for software and hardware products and services. Jaroslaw Knapik holds an MSc in International Business from the Krakow University of Economics, enhanced with AIESEC experience. Additionally, Jaroslaw has studied computer technology at the State University of New York.