Survey Weighs Impact of Know-Your-Customer Regulatory Changes on Banks

6 July, 2015 (10:41) | Blog | By: admin

By BankNews

June 29 – Sixty-one percent of financial institutions are affected by Know-Your-Customer regulatory changes and have noted an impact on their compliance operations in a number of areas, according to a new market survey conducted by NICE Actimize, a provider of financial crime, risk and compliance software for the financial services industry.

The NICE Actimize “Customer Due Diligence (CDD) Market Survey” conducted in May 2015 identified the top KYC/CDD operational challenges and priorities of the respondents. More than one-third of the institutions noted that data quality and availability was one of their top operational challenges relating to their current CDD/KYC program, followed closely by reliance on manual processes and maintaining their existing IT infrastructure. Other challenges mentioned included addressing new risk scenarios, lack of clarity from regulators, and difficulty with enforcing risk policies.

More than 30 percent of the institutions said that developing training programs for their existing staff related to their KYC/CDD programs was a top operational priority for the next 12-18 months, followed by improving data management and data quality, and streamlining end-to-end CDD/KYC processes and automation through investments in new technologies. Implementing improvements in their data management strategies was also cited as a short-term objective by the institutions surveyed. Other operational priorities cited in the market survey included the consolidation of KYC/CDD programs and real-time risk assessment at onboarding.

NICE Actimize conducted its online Anti-Money Laundering (AML) “Customer Due Diligence Market Survey” among 381 anti-money laundering compliance professionals representing financial services firms from multiple geographies, institution sizes, and types. About half of the respondents came from retail/consumer financial institutions or commercial/corporate banks.

“These survey findings reflect an AML compliance environment that demonstrates an increasingly aggressive regulatory enforcement activity along with larger penalties and fines,” said Joe Friscia, President of NICE Actimize. “Financial institutions have clearly moved AML risk management higher on their priority list, and KYC/CDD is core to those concerns.”

Conducted through a variety of industry AML channels, nearly half the survey respondents came from financial institutions across North America, with EMEA comprising 19 percent and APAC comprising 13 percent of the total survey respondents. About 25 percent of the institutions surveyed had assets greater than $100 billion, 27 percent of the institutions surveyed had assets between $100B and $5B, and the rest (48 percent) had less than $5B in assets. More than half the respondents had CDD (including KYC, EDD and CIP) as a primary job function, with 24 percent of the total having transaction monitoring duties as their primary job function.

NICE Actimize recently launched its new Actimize CDD Suite, the first enterprise-ready, out-of-the-box solution that addresses “branch to bank” customer risk, while managing requirements for due diligence and entity monitoring regulations.

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