REGULATORY EXPERTISE X ARTIFICIAL INTELLIGENCE
Traditionally, client lifecycle management (CLM) processes have been highly manual, inefficient, and cumbersome. This results in delayed processes, impacting customer experience and potentially exposing organizations to financial crime risks.
Know Your Customer (KYC) is an integral part of the CLM processes. The ever-changing regulatory landscape coupled with the need for vast amounts of data from various sources further complicate the process of creating a KYC profile. Typically, analysts research a number of sources for client information such as formation details, legal IDs, ownership and key controllers. This collection, assessment and organization of customer information is manual, repetitive, time-consuming and open to human error.
HSBC aimed at transforming these manual processes through automation to achieve reduced turnaround times, higher throughput and better quality, at sustainable costs. The automation of mundane tasks would also allow analysts to focus on exceptions and critical processes.
To achieve this objective, EXL leveraged Digital Intelligence to create a product for HSBC, powered by AI and advanced automation; one with potential to expand from a KYC and exits management tool to an end-to-end CLM solution.
EXL’s in-depth banking and financial services experience, coupled with HSBC’s subject matter expertise, helped articulate the problem statement, design a future state and create a solution in record time. The first working iteration of the platform was delivered in 10 weeks.
The product now supports KYC research for 20+ markets across Americas, Europe and Asia.
“ Typically, analysts research a number of sources for client information such as formation details, legal IDs, ownership and key controllers. This collection, assessment and organization customer information is manual, repetitive, time-consuming and open to human error.”
KYC research provides client information required to process a KYC profile. Research is required when a new client is being on-boarded, during a periodic refresh or when a material trigger is identified. Before EXL’s digital solution, the process was time-consuming, complicated, and prone to human errors.
Research analysts previously collected information from at least three sources per client, reviewed every data element, resolved conflicts, and arrived at answers for KYC questions. They would then validate the data and answers using evidential documents which were ranked by relevance and annotated. These documents would be reviewed for sanctioned countries, etc. This entire process could take over five hours per KYC profile. EXL used digital intelligence to create a solution that addressed the business problem using a combination of automation, advanced analytics and natural language processing.
The solution currently searches over thirty sources to identify and ingest client information. It then uses proprietary algorithms to resolve conflicts and arrive at a set of answers for more than 100 KYC questions. The tool also customizes the output (data and documents) based on user roles, region and entity type.
The solution allows the analysts to now focus on critical tasks and resolving exceptions, rather than the time-consuming tasks of collecting, ingesting and arranging data.
Once the right information for a particular client was identified using analytics and AI, the data is automatically aggregated to make it easily accessible by human employees. Rather than spending their time hunting down information for each individual client, the platform let HSBC’s workers focus on resolving exceptions where the information for a client couldn’t be found, mistakes or other unique circumstances. The platform uses machine learning to improve itself based on these exceptions, decreasing the chance of similar errors in the future.
“ The solution currently searches over thirty sources to identify and ingest client information. It then uses proprietary algorithms to resolve conflicts and arrive at a set of answers for more than 100 KYC questions.”
Using EXL’s platform, HSBC could collect the data required by KYC regulations faster and more accurately than ever before. KYC research now takes 90 minutes instead of five hours, with the platform covering approximately 70% of the overall volume of work across 20 different countries. Client exits only take around one hour instead of four hours, with agents only needing to go through seven steps instead of 35.
The platform provided a solid foundation for HSBC to benefit from a 75% productivity increase in the customer exit process and 100% accuracy rate for KYC research. HSBC is positioned to be able to scale this platform into an end-to-end solution, capable of portfolio monitoring and flagging of suspicious accounts among other use-cases. Finally, the elimination of manual tasks resulted in $15+ million in savings and enabled the deployment of personnel to higher value activities.
To find out more about how EXL uses Digital Intelligence to help banks and finance organizations transform, visit this link.
- Streamlined KYC processes
- Faster customer profiles without sacrificing accuracy
- Simplified ongoing monitoring
- Reduction in manual effort and overall compliance costs
- KYC remains an inefficient, labor intensive, expensive process for most banks despite significant investments
- EXL developed a solution using its strength in banking analytics, deep experience in financial services regulations, and collaboration with its leading industry partner, HSBC
- This solution addresses the accuracy and productivity problems of KYC, simplifies ongoing monitoring, and reduces manual efforts and overall compliance costs
- Banking analytics expertise and data scientists
- Advanced automation to enhance data aggregation
- AI to prioritize information gathering
- Machine learning for ongoing improvements
- Compliance experts focused on exception processing
- $15+ million in savings
- Shortened turnaround time for client selection and exit management processes by as much as 75%
- 80-100% increase in efficiency for data aggregation
- 100% quality