In an effort to curtail the abuse of financial and communication services through money laundering, and the funding of criminal and terrorist activity, Regulatory bodies, globally, have introduced Know Your Customer (KYC) regulations – requiring commercial entities in certain sectors (particularly finance), to collect the identity information of clients. Businesses could possibly leverage Customer Relationship Management (CRM) software to make the KYC verification process more convenient, for both businesses and customers.
CRM systems are already in wide use by businesses, to help streamline the communication between business and clients. A business using a CRM platform has the ability to collect large quantities of its customers’ information and store it on a central database, allowing the firm to automaticall access, said data,when needed – in order to conduct the between it and its customer.
CRM systems are the backbone of all the online registration forms we fill in, and are the reason our SMS and email inboxes remain abuzz with activity. Businesses like banks, telecommunications firms, or any other organization finding itself required to conduct KYC processes could possibly leverage CRM to complete the activity more expediently and cost effectively.
KYC data collection is generally a paper, and time intensive process, resulting in significant losses in productivity as staff spend a long time onboarding each individual client. By adopting a CRM-based KYC process, businesses do away with the cumbersome paper-based process, and complete the procedure more easily and speedily, allowing them more time to focus on income generating activity.
CRM-based KYC allows firms the added benefit of being able to collect more precise demographics data. CRM software gives companies the ablility to leverage data based on consumer behavior, potential leading to more effective targeting for marketing drives.
KYC and Business
Businesses like banks, exchanges, telecommunications service providers and other firms who are ,by regulation, expected to collect customer identity information often find themselves between a rock and a hard place. While the process is a regulatory requirement, and keeps firms on the right side of the law, it has no actual benefit to the firm, beyond that.
Instead, having to conduct KYC procedures eats into a firm’s resources. The process also tends to negatively affect firms who conduct KYC, as customers who fail to fulfill the compliance requirements will be denied service, resulting in a loss of potential revenue for the firm.
Using CRM-based KYC goes beyond simply collecting and storing customer data during the registration process;
- It allows for the easy storage of identifaction information, as well as enables instantaneous access and management of said data.
- Allows firms to keep track of each customers’ compliance status, and automatically communicate with non-compliant customers to encourage them to achieve compliance. (Ever left a registration process unfinished, then got emails from the website you had interacted with, letting you know that you had some steps to complete to be fully registered? That was their CRM system at work.
No More Filing Cabinet
As previously mentioned, because CRM software stores an ocean of data onboard it’s system, as well as allows for easier access and management – along with other above mentioned benefits – the cabinet system for paper file storage is no longer necessary.
Another benefit to the use of CRM systems for KYC that is worth a mention is that there is less risk of files getting lost. Which negatively affects a customer’s experience of a business’s service, as they have to bare the inconvenience of redoing the KYC process.
Harnessing CRM software to automate the KYC identity verification process allows for the speedier onboarding of customers, while freeing up staff time for more productive work. Organizations also save on the cost of conducting KYC procedures, while being able to communicate with customers more effectively.
CRM being applied to the KYC process, in a digital sense, enables the business and the client to begin their relationship with a friendly handshake, as opposed to an arduous rite of passage.
We may see CRM-based KYC processes become the standard as firms seek to cut spending and improve productive output as the global economy falters. Many companies have begun adopting the software, with crypto exchanges and Neo Banks leading the charge.