Driving simplification, efficiency, and cost savings for global KYC process

Overview

A global bank engaged Alacer to conduct an end-to-end global KYC process review across First Line, Second Line, Shared Services, and FIU organizations to reduce overall cycle time, increase standardization, meet regulatory expectations, reduce head count, and create capacity. Alacer team consisting of AML and process reengineering experts interviewed 100+ bank Managers & Line Staff, conducted onsite reviews in US and European operation as well as Kaizen session with the global cross functional teams and came up with a set of recommendations focused on streamlining the process along with significant capacity savings and reduced cycle time.

Challenges

The bank’s KYC global requirements and past transformation efforts became burdensome and were experiencing heavy backlogs, delays, and continually missing target dates to complete the KYC reviews in a timely manner. The status quo has been to throw more resources to get timelines under control but the bank realized that it is not a sustainable long term model and needed to establish metric-based baselines and drive future state recommendations based on the current state data and pain points. Alacer AML and Process experts identified key challenges including-
• KYC requirements exceeded actual regulatory requirements in many regions and were adding to the workload
• The ongoing client information update process was not followed properly adding to additional work during periodic reviews
• Process had unusual amount of QA/QC reviews and associated back and forth that was slowing down the entire process and resulting missed timelines
• Non standardized process across multiple regions and business lines added to complexities and inefficiencies
• Supporting technology including the workflow/case management systems was outdated and was causing significant amount of manual work and errors
• Lack of a consistent Measurement System was making timely and accurate reporting challenging
• Change management and control process was not consistent

Results

The Alacer team worked closely with the global cross functional teams from the North America, Europe, and Asia businesses and support teams and came up with a set of prioritized (based on costs vs benefits) recommendations and future state process design that covered people, process, technology and data related domains. The recommendations translates into reduced cycle time from 90 days to less than 45 days, improvement of processing times by as much as 60% and potential costs savings of over $8MM.