Explore alternatives to the customer outreach model
The typical customer outreach model across commercial lines of business is through sales or relationship managers. As the interface to the customer, the sales or relationship manager is typically charged with collecting required information and documentation, usually in the form of a request for information (RFI) to the customer. Typically, the majority of KYC refreshes that require an RFI will result in multiple outreaches to complete all requirements in the RFI. The count is typically much higher for more complex or riskier relationships.
Not surprisingly, the constant outreach to the customer is often frustrating and erodes the customer experience, overall impacting customer loyalty and retention.
Institutions are increasingly exploring alternatives to the customer outreach model, such as:
Support for sales and relationship managers
Sales and relationship managers are often asked to convey KYC requirements to the customer. In less mature programs when the customer is not accustomed to the KYC refresh, relationship managers may find themselves fielding questions from the customer on context for the request or pursuing alternative solutions for missing documentation. Moreover, there is often a disconnect between sales and KYC operations teams on acceptable RFI responses. For example, a typical RFI question is: does the customer have controls for operations in high-risk jurisdictions? While a response of “yes” can be technically correct as an RFI response, the expectation often is a risk narrative describing unique jurisdictional risks and company-specific controls for mitigating those risks.
A key driver in reducing additional outreach is a dedicated help desk or outreach team that supports sales and relationship managers to help clarify requirements and acceptable responses, suggest documentation alternatives or provide context for a request if they expect a customer may challenge an RFI. Another similar approach has been to embed KYC subject-matter advisors with the sales and relationship teams. In both instances, the key to success is that the help desk, outreach team or KYC subject-matter advisors have a deep understanding of KYC requirements so that they are not simply a “middleman” passing information back between KYC operations and sales but can provide valuable context and insight.
As an alternative, institutions have explored direct outreach to the customer by the KYC operations team. Success with a blended approach first (sales and KYC operations jointly reaching out to the customer; KYC operations joining conference calls with the sales team to lead RFI discussions) may indicate the institution is ready to explore more direct outreach by KYC operations.
Customer-centric alignment of Know your customer (KYC) operations teams
Grouping KYC operations team members by specialization — relationship, region, industry or revenue tiers (highest-performing team members dedicated to highest-revenue customers) — has been found to improve the customer experience. The specialization enables KYC operations to share tangible examples for risk-related RFIs. For example, a KYC specialist focused on customers that are pawn shops, typically viewed as a high-risk industry among most institutions, can readily share examples of how state-specific laws that regulate and license pawn shops can also be effective BSA and AML risk mitigants and provide specific guidance on information to collect from the customer.
This approach not only aligns analysts to policies, customers and services that they are familiar with but also supports the relationship development between relationship managers and KYC operators. A positive rapport between operations and sales creates efficient and streamlined processes for similar customer segments and promotes a culture of one team driving toward a focus on revenue and customer centricity.
Manage and prioritize the refresh population
A leading practice across the industry is to reduce and prioritize the refresh population by identifying duplicate or dormant accounts, group interrelated accounts into family relationships and consider customer exits based on specific criteria, such as the commercial value of the account when considered against risk and the additional control requirements.
Too often, institutions perform ongoing due diligence on dormant and/or duplicate accounts, diverting resources and time away from risk, as well as more strategic or commercially valuable customers. In other instances, institutions usher dormant accounts through the same KYC processes as strategic and high-revenue accounts. A lack of prioritization can cause the most important customers to miss refresh deadlines and trigger automatic restrictions, such as limiting transaction activity or placement and notification of pending account closure.