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The whole picture: A holistic approach to KYC/CDD

The whole picture: A holistic approach to KYC/CDD

Keeping close tabs on customers is more than regulatory box-ticking. An effective Know Your Customer (KYC) & Customer Due Diligence (CDD) operation can deliver enhanced productivity, more accurate risk outcomes, major cost savings and a materially improved customer experience.

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Richard Robinson

Principal Advisor

KPMG in the UK

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The whole picture: A holistic approach to KYC/CDD - Shaking hands

Know your customer (KYC) and Customer Due Diligence (CDD) are an essential part of any business’s armoury. And yet, despite heavy investment, many organisations still suffer serious operational issues, hampering their ability to carry out these functions in a streamlined, timely and cost-effective way.

KPMG’s experience of working with clients around the globe identifies the same challenges occurring time and again:

  • Little joined-up thinking across policy, procedures, underlying process and technology
  • Labour-intensive operations due to extensive manual processes 
  • Low quality case outcomes based on fragmented data
  • Insufficient harnessing of technology, data and analytics.

These shortcomings have damaging repercussions. They can result in low quality financial crime decision-making, costly remediation and regulatory fines, impaired customer experience, reputational damage  – and a lost opportunity for the good of society as a whole in the fight against against financial crime. 

The KPMG KYC/CDD Navigator: a 360° answer to the challenge

KYC/CDD is a complex task to execute effectively. The diverse nature of the challenge explains why so many businesses have had so little success in tackling it: they simply don’t know where to start or how their challenges are related. 

KPMG’s KYC/ CDD Navigator solution answers that by taking a holistic approach. It highlights the challenges your KYC/CDD function faces and helps pinpoint opportunities for solving them in a simple and structured way.

Developed as an overarching framework, it can assess your entire KYC/CDD operation, helping you quickly understand the maturity level of your current operating model and where improvements can be introduced.  Data-model driven solutions are key here, but so too are a host of other lenses, such as the interpretation and execution of policy and people-related issues.  

The KYC/ CDD navigator brings together insights and experience that KPMG has gained from numerous CDD client engagements, based on defined benchmark standards and industry-wide knowledge of CDD maturity.

Putting your business through its paces

The KYC/CDD navigator rapidly tells you how your organisation measures up across the four main components of CDD: 

  • Policy and risk management: how policy is translated into business rules and data requirements and an accurate assignment of risk to your in-scope customers. 
  • Processes and services: the efficient running of all the activities required to take your clients through the KYC/CDD lifecycle, such as onboarding, event-driven reviews and news screening.
  • People and organisation: how effective your performance management, leadership/ culture and learning are in ensuring your people have the necessary skills and support.
  • Data, technology, and analytics: ways in which internal and third party data can be optimised to enhance risk decision-making, drive operational efficiencies, identify commercial opportunities and improve the customer experience.

The process starts with a maturity assessment to highlight any gaps in your CDD function, measured against industry standards, and then provide a view of your issues and opportunities. 

Next comes tailored diagnostics. This is a deep dive analysis in priority areas such as a policy lineage review, structured analysis to understand the links between policy/business rules and underlying data and technology, or customer experience diagnostics to map out where the customer journey needs to be improved. 

The final stage is a detailed transformational roadmap, including a full set of improvement opportunities, or a business case and transformation plan. Data-model driven solutions are at the heart of this, such as data aggregation, intelligent automation and integrated technology.

Realising the benefits, fast

Clients who have already used the KYC/CDD navigator point to a range of benefits to their business, once the improvements recommended have been put in place:

  • Higher quality financial crime decision making, based on well organised and easily accessible data.
  • Significant cost savings, thanks to clamping down on inefficiencies in processes, data management and IT. 
  • Improved customer experience, removing the need to repeatedly ask customers for the same information.
  • Making use of the wealth of data captured during CDD to help drive commercial decisions.

Making the difference

The KPMG KYC/CDD navigator is a simple and effective approach to a highly complex – and costly – challenge. 

If you would like more information on how to optimise your KYC/CDD business operations, enhance the customer and employee experience and improve your risk management and financial crime compliance, please get in touch with either Richard Robinson or Simon Mansell.

© 2020 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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