Why KYC Compliance Doesn’t Have to Ruin the Customer Experience

By Nisha Pattan, Product Marketing Director, DocuSign

When it comes to the customer experience in banking, it often feels like financial institutions must take one step back for every two steps forward. Why? As banks continue to improve their digital customer touchpoints, online and on mobile devices, they face a near-constant increase in the amount (and enforcement) of regulations. That leaves banks scrambling to integrate new compliance requirements while maintaining a smooth and efficient customer experience.

In the case of Know Your Customer (KYC), the burden on customers is so high that banks are actually losing customers in the onboarding process. According to Thomson Reuters, 89 percent of corporate bank customers did not have a good KYC experience with their banks and 13 percent chose another financial institution because of it.

Banks control their own destiny

To comply with KYC, banks ask potential new customers for specific information that they use to assess whether the client is likely to be engaged in illegal financial activities, including money laundering. Banks accept or reject applications based on their risk tolerance. Approving nefarious customers can have massive repercussions: Between 2008 and 2018, U.S. financial regulators issued $23.52 billion in KYC and anti-money laundering fines.

The challenge for banks? Juggling how to collect this information without burdening clients. For banks, the ultimate goal is a data gathering process that only requires information relevant to each account applicant and that is seamlessly integrated into a bank’s onboarding process.

To meet compliance rules, banks at a minimum should follow these tips:

• Ease the onboarding process by minimizing data requested for KYC
• During the initial onboarding process, ask clients to use multiple forms of authentication (knowledge based, two factor authentication, digital ID) for KYC and AML checks
• Score customers on potential risks they pose as it relates to their exposure
• Seamlessly maintain a digital trail of document access, viewing & sharing

A common solution for a common goal: DocuSign Agreement Cloud

By integrating specific information requests into the interfaces customers use for onboarding, banks can make the KYC process faster for customers and less costly. DocuSign Agreement Cloud simplifies three key aspects of KYC without requiring customers to leave the digital signing and agreement process when they open a new account:

1. Customer-specific information gathering: Customers unhappy with the KYC process at their bank may be fed up with having to provide information they deem irrelevant to them or that violates their privacy. DocuSign Guided Forms powered by Intelledox can intelligently help a client fill out relevant fields based on their risk profile and other data they have provided, eliminating the need to share more information than necessary.
2. ID Verification: DocuSign ID Verification offers secure, legally enforceable ID verification within the signing process. What once had to be completed in-person at a bank branch or in the presence of a notary can now be completed digitally.
3. Authentication: The DocuSign Identify Platform can connect majority identification methods into the customer onboarding process, DocuSign also offers several ways to digitally authenticate a customer to prove that they are who they say they are. Authentication is a key step for KYC and can be done as a part of the eSignature process, as well. DocuSign can authenticate via email, text message, phone, or by asking questions based on publicly available information about the customer.

Each of these improvements happen directly within DocuSign and can be integrated directly into a bank’s core systems like Salesforce, Finastra or Symitar. By making KYC a seamless, unintrusive part of the onboarding process, banks can be confident that an interested new customer will not be deterred by forms and KYC requirements, while also mitigating the bank’s cost of compliance.

To learn more about how DocuSign meets your compliance requirements, check out this link.