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Beneficial Ownership Data Adds Complexity to Compliant Client Onboarding

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Client onboarding and Know Your Customer (KYC) processes continue to be pain points for many banks, but the story does not end here, with increasing regulatory requirements raising additional challenges around beneficial ownership data.

The problem of integrating beneficial ownership data with client onboarding and KYC systems was addressed during a recent A-Team Group webinar. The webinar was moderated by A-Team editor Sarah Underwood and joined by Ben Marsh, CEO at iMeta Technologies; Anders Rodenberg, director of sales at Bureau van Dijk; and Kelvin Dickenson, vice president of compliance solutions at Alacra.

To set the scene for discussion, webinar participants answered a poll question about how well the process of client onboarding is working within their organisations. Just 17% said the process is working very well. The same percentage said the process needs significant improvement, while 39% said the process is working but needs some improvement, 22% said the process is being reviewed for change, and 4% said they are implementing the process.

The webinar speakers agreed that there is still room for improvement in onboarding systems, and noted outstanding challenges including difficulties in sourcing necessary data and a lack of integration between siloed systems, and the need to automate connectivity to external data and implement flexible operating models and tools to accommodate regulatory change.

Moving on to consider the integration of beneficial ownership data with existing onboarding and KYC systems, a second poll questioned the extent to which organisations have achieved this. Just 8% said integration is complete, 42% said integration is nearly complete, and 12% said they had not yet started integration, leaving this latter group missing out on the significant operational benefits of integration noted by 50% of webinar participants in a third poll.

The speakers discussed how different jurisdictions and regulations have different requirements in terms of the percentage holding of an entity at and above which beneficial ownership data must be provided. They also talked about commonalities that can support compliance, including the need to automate collection and validation of external beneficial ownership data, ensure data can be rolled up to understand credit risk, and manage ongoing challenges presented by constant changes in beneficial ownership.

While compliance with local onboarding and KYC rules is not optional, improving processes and successfully integrating beneficial ownership data can help banks improve the customer experience, reduce time to revenue and cut operational costs. But that is still not the end of the story, with speakers suggesting regulatory enforcement will get tougher and requirements for transparent beneficial ownership data will get more rigorous.

Listen to the webinar to find out about:

  • Outstanding challenges of KYC and client onboarding
  • Requirements for beneficial ownership data
  • Sourcing and integrating the data
  • Sustaining successful onboarding
  • Operational and business benefits
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