The lack of a uniform global KYC standard, and increased global regulatory requirements, are key hurdles, according to a mini survey
From a September to October 2022 global survey of 200 senior fintech executives to understand the latest fintech strategies and challenges regarding customer experience, one firm has concluded that Know-Your-Customer (KYC) checks are the top challenge for the industry.
According to its findings, the KYC challenge affects even the most established fintechs, echoed by 37% of mature fintechs in its survey. This could be due to the lack of a uniform global KYC standard and increased financial crime compliance requirements in global sanctions.
For example, the KYC process is hampered when documents such as identity cards are not shared in a consistent manner (photo vs scanned, colored vs greyscale), resulting in back-and-forth correspondence that sets a poor tone for building good customer relationships. In a similar vein, underinvestment in technology continues to hinder the onboarding of new customers.
Other key challenges cited by fintech leaders mentioned in the report were the need to maintain sufficient operating hours; a worldwide client base, and the availability of quality, responsive services. Also, 21% of fintechs polled were using data analytics to support their KYC processes, and another 35% outsourced their KYC processes, focusing on personalized marketing (55%) and helping customers make financial decisions (40%).
Finally, fintechs in the survey with a business-to-consumer focus found it more challenging to manage KYC (55%), suggesting that more consumers abandoned financial service applications due to lengthy forms and excessive personal data requests.
According to Ricart Valvekens, Chief Client Solutions Officer, TDCX, which commissioned the mini survey: “While it is unsurprising that fintechs are dedicating more resources to revenue generating activities, it would be beneficial in the long run to leverage data analytics to enhance their KYC processes. We have also observed that more clients are looking for ways to drive business performance through transformative CX solutions.”