Jinfo BlogOutsourcing Core Compliance Functions

Friday, 15th August 2014 Sign in to MyJinfo or create an account be able to star items Click for printable version Subscribe via RSS to get updates as soon as Blog items are added Tweet about this item on Twitter Share on Facebook Share on LinkedIn

By Darren Hickman

« Blog


Outsourcing key business functions has various drivers. Darren Hickman examines what prompts businesses to outsource their Know Your Customer (KYC) processes and what benefits this can bring to compliance professionals and their organisations.


FreePint Topic Series: What You Need to Know Your Customer (KYC)Outsourcing of core business functions has been common for some time but where Know Your Customer (KYC) is involved, the process has been treated with a certain amount of trepidation.

This is likely to be driven by the fact that you can outsource the undertaking but not the regulatory responsibility - and with the growth in fines and threat of prison terms do you want to trust a third party?

With the ever-growing regulations comes a greater burden at the point where KYC is required.

The challenge is then to minimise the impact on your customers and keep costs under control.

With the right checks and balances, outsourcing can bring benefits to a company and risks can be reduced. So, what are the options, what are the pitfalls and where to start?

Benefits of Outsourcing

The use of a third party can bring a number of savings and help improve your KYC procedures.

Improvements can include reductions in infrastructure and staffing costs.

Also, keeping up with the latest technology and adapting to meet regulatory change is no longer a cost for you to bear.

When Should You Outsource?

However, change usually needs a trigger, so when is the right time?

A company can wait for KYC to start impacting negatively on their business:

  • This could be in the form of delays experienced by your customers, or a regulatory failing. Either of these could illustrate that it's too late, as this may start to damage your reputation and remedying the situation will need work.
  • Maybe a lesser trigger, such as contract renewal or general curiosity that you have the right solution in place should be used.

KYC as a Service

The options available to help your business are continually improving.

KYC as a Service is relatively new and offers a number of benefits.

These services bring trained analysts together with data and technology, enabling them to go a step further.

Greater flexibility in conjunction with improved controls and the potential to reduce costs is a good driver for change.

As a not too well known alternative, but one that is starting to grow, the place of KYC as a Service in the market it is worthy of inclusion in any review.

Editor's Note

FreePint Subscribers can log in to read and share more insights as well as ideas for next steps inThe KYC Conundrum - Should You Outsource?

This article is part of the FreePint Topic Series: What You Need to Know Your Customer (KYC) running from July-September 2014 which includes articles, reviews and expert tips. Register your interest now, and you'll also get a free PDF report with selected premium articles when it's published in September.

« Blog

Benefit from our research

Content and Community

Connect your team with the practical tools, original research and expertise to build and support information strategy in your organisation.

A Jinfo Subscription gives access to all Content (articles, reports, webinars) and Community.

Subscription benefits


Our proven processes, resources and guidance will help your team make the shift from transaction centre to strategic asset.

Read case studies, and start the conversation.

Consulting benefits