Friday, 15th August 2014
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.
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:
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.
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.
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