Dec 2018 - Jan 20198IN MY OPINIONRobots Getting to Know Your CustomersBy Erik Obermeier, SVP, Head of Financial Crimes Compliance Advisory Services, Texas Capital BankMost Know Your Customer (KYC) processes utilized by financial institutions are inefficient, prone to errors, make for a bad customer experience, and cost institutions millions of dollars every year. Some of the solutions to help institutions become more effective and cost efficient include; robotic process automation, machine learning, and artificial intelligence. The focus of this article will be on Robotic Process Automation (RPA) in KYC, which really in its simplest terms is taking manual routine processes and automating them saving institutions money while being more efficient and effective. KYC is a critical function to assess and monitor customer risk by establishing the identity of the customer, understanding the nature of the customer's activities, and assessing the money laundering or terrorist financing risks associated with the customer. The manner in which KYC activities are completed and managed at institutions have an impact on client retention, the cost of compliance, and therefore the bottom line for the institution. The industry standard, up to this point, has been for every regulatory requirement change is to add additional staff to complete the additional workload to meet the new regulatory requirements and continuing to complete the legacy requirements in the same manner they have been completed for many years. Adding more manual processes on top of other manual processes increases the likelihood of errors, which leads to non-compliance of regulations and delays in onboarding potential customers.Are these manual tasks really the expectation of the regulators? At the end of the day regulators are going to come in and assess the effectiveness of the program to be compliant
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