COVID-19: A CATALYST FOR INNOVATIVE THINKING? BY MHC INTRODUCTION The impact of COVID-19 is continuing to create uncertainty and the economic outlook for the near-term remains bleak. The detrimental impact on long-term economic growth could be significant. Many organisations have had to rethink their technology and business strategies in response to the emerging challenges, and to remain resilient and efficient. This article explores how the COVID-19 pandemic could be a catalyst for innovative thinking regarding client onboarding and the Know Your Customer (KYC) end-to-end process, in turn bringing benefits to organisations and their customers beyond just that of regulatory compliance. COULD THE COVID-19 PANDEMIC INSPIRE INNOVATIVE THINKING? In response to the anticipated economic recession brought about by the COVID-19 pandemic, organisations have curtailed their H2 2020 investment spend and refocused their 2021 book of work. Many financial services institutions are facing tough prioritisation decisions regarding how much to invest in new technologies and change their operating model so as to remain competitive, while sustaining significant spend on keeping pace with regulation. However, alluding to Amazon’s Leadership Principles, particularly that of ‘Frugality’ in which it encourages ‘accomplish[ing] more with less’, constraints breed resourcefulness, self-sufficiency and invention, which has evidently been successfully embedded within the way in which the entire organisation operates given its leadership in innovation and ability to consistently disrupt markets. HOW INNOVATIVE THINKING IN CLIENT ONBOARDING, CDD AND AML COULD BENEFIT THE WIDER ORGANISATION Despite investment budget cuts, organisations must continue to increase the efficiency and efficacy of their customer onboarding, Client Due Diligence (CDD) and Anti-Money Laundering (AML) end-to-end processes, and incorporate new regulatory changes, to retain the licence to operate and provide an acceptable client experience standard. An organisation may look to reengineer its customer onboarding, CDD and AML processes to enhance its customer information gathering mechanisms, in order to access, process and analyse customers’ data in unprecedented ways, and generate more insights for greater cross and up-selling opportunities. For example, the scope of the data gathering digital process for KYC, CDD and risk scoring, used at the start of the relationship and during the client lifecycle, could be expanded to collect additional relevant data. Furthermore, by leveraging AI-based Natural Language Processing (NLP) technology, used for identifying beneficial owners and linking connected parties, additional customer data could be obtained from publicly available sources such as social media. Other opportunities for expanding an organisation’s overview of its customers may arise from AI systems used for screening for adverse press and sanctions, and transaction monitoring, where additional data could be gathered regarding the customer’s business partnerships, trading activities, etc. AI-enabled systems will rapidly deliver integrated data from numerous sources for customer intelligence to be shared across the business. The adoption of AI-based data analytics capabilities, used to detect AML patterns and anomalies, could also be used to obtain a comprehensive and detailed overview of the customer, and generate new revenue opportunities. IN CONCLUSION In this article we have suggested that the financial constraints placed on organisations due to the COVID-19 pandemic could inspire a wave of innovative thinking. AI-based technology, deployed to enhance the customer onboarding, CDD and AML end-to-end process, can also be leveraged to provide useful customer insights, which may lead to revenue growth and improved customer retention. Should you wish to discuss how MHC can support your organisation in understanding how to fully leverage AI-based systems for customer onboarding, AML and to gain customer insights, please contact us at info@mansion-house.co.uk FINANCIAL CRIME RELATED INSIGHTS ARTICLES SERVICE: FINANCIAL CRIME FINANCIAL CRIME REGULATORY CHALLENGES 19/07/2021 ARTICLES SERVICE: FINANCIAL CRIME RESOLVING REGULATORY CHALLENGES 19/07/2021 ARTICLES SERVICE: FINANCIAL CRIME ARTIFICIAL INTELLIGENCE: THE VALUE OF AN AI MATURITY MODEL 21/09/2020 ADDRESS Dowgate Hill House, 14-16 Dowgate Hill, London, EC4R 2SU EMAIL info@mansion-house.co.uk TELEPHONE +44 (0) 20 3855 5680 FOLLOW US ©2021 MANSION HOUSE CONSULTING · BUILT BY KLINICAL PRIVACY POLICY TERMS & CONDITIONS COOKIE POLICY DISCLAIMER ANTI-SLAVERY STATEMENT