September 23, 2020

By Victor van der Kwast

These days we live in a perfect storm, with global warming, COVID-19, geopolitical shifts, power struggles, election campaigns, the next steps (or not) in Brexit and a new way of working.

To continue to focus and deliver quality work is not that simple these days. Work is now often remote, from home or via Zoom or Skype, and sometimes in the office. Is an office still needed?

New Reality

Life has changed, the way we work too and the way business will operate as well. That creates new opportunities but also uncertainty for many with recessions, bad company results and a focus on costs, with lower or uncertain revenues. Working from home is now not just an option, it might be more reality than commuting and going into the office. Digital is the way, Zoom and Skype too and this is now engrained in the system(s). Many companies were able to manage, others had to run to accommodate the work via Internet, from home, with clients demanding suddenly digital access, the same clients that refused it just a while ago.

It is a reality, digital goes fast, people have had their holiday plans changed, stay home or in the country and when they still travel, they are open to COVID-19 or quarantine or both. A difficult situation. There is good news, the Paris (or Kyoto) climate treaty might be more easily achieved, air flights are now rare and limited, airlines and oil companies struggle with lower demands for fuel, also with lower use of cars as commuting is limited, hence car dealers have lower sales, and commuting workers drive less, so less traffic jams, good news for pollution and global warming.

Also Regulatory Changes?

The regulatory landscape has not changed, is still core and needs to be addressed.

In fact, the crises have raised the need for control and insight with more people using the internet to buy groceries, and other shopping which normally was done in stores. This has increased the cyber-attacks, also identity theft, and the abuse of credit card details and codes. The KYC questions remain, reviews of AML too with large concerns on costs and operational associated issues (false and true positives). Financial institutions are now considered the gatekeepers who need to address and control the flows. This is a large and costly effort, with rising concern for clients and financial institutions, CFO’s and CEO’s and dropping income, rising costs and large quantity of data to be screened by rather junior, inexperienced people.


One would expect a more prominent role of digital, AI and automation with clients’ desire for digital service, quick onboarding routines and limited checks. It appears mis-aligned with the need and desire to have the proper KYC data set and the controls but Fintech’s and other fast movers (e.g. T26, Wirecard, Softbank) have proven all to be driven by quick steps, 7 clicks and more remote access to accounts and payments. A routine that is not similar to the traditional Banks that require significant more steps and routines to be compliant.

KYC, A continuous Process

Know your clients is such a familiar topic for financial institutions, yet still proves so hard to get right as rules are not always clear and data set requirements increasingly diverse, deep. The cost of the effort is very high, yet the cost of repair and reputation damage are rising as well, a prisoners dilemma.

In the new reality and sharpened by COVID-19, this is perhaps the time to work more together and use other sources, business and data (feed) providers to work in tandem while the financial institutions remain the accountable the data can be enriched, completed and validated by the clients, ensuring data privacy is supported and GDPR protected. Some parties just focus on the process, and the ease of that while others work on data feeds and links that ensure official sources and data validation.


One needs to really be constructive and organized in the data capture, recording and refresh. It is clearly not a one-time event, it is a continuous process and routine that requires focus and dedication, automation and data storage with each interaction (call, transaction, product). Best is possibly to also record all that data into a structured and efficient CRM tool, that allows for client convenience and insights, relationship managers use and effectiveness, while it provides the necessary controls and oversight for all parties involved. But it needs discipline, routines, process and quality to be well structured to be effective.


We live in challenging times. The current environment triggers events and requirements that go faster then anticipated and digital is the new reality, business processes are changing, offices become optional but client data remains the core to get right for financial institutions. Be it for KYC or AML or for digital activities that help clients and institutions to operate efficiently and effectively. A good business and data process is the key to success and cost control, with large quantities of people to upgrade or repair the outdated or incomplete data is not sustainable. A partner or co-operation model might be more effective and allows all relevant parties to focus on their best skills, purpose.

A perfect storm that can trigger a new way of thinking and a continuous focus on data, costs and clients to remain sustainable, informed and in control, not just today but also in the future.