AI and robotics offer intrigue for money laundering compliance, but it’s the low-code/no-code movement that’s shaking up how issuers future-proof customer onboarding, know-your-customer issues and regtech.
The largest issuers have struggled with siloed technology that fails to rapidly respond to new payment, laundering and KYC regulatory mandates in different countries, while prolonging onboarding time for the complex array of customers they have — from corporate institutions to correspondent banks.
The front office and corporate executives lack visibility into the process. Technology doesn’t scale. Even with the emergence of today’s regtech solutions, it takes most institutions today more than 12 months to make regulatory changes. The pressure to adopt new industry best practices cannot lead to creating a new layer of hard-coded bespoke applications that become difficult to adapt and are no longer future-proof. In an era of technology simplification, the emergence of new regtechs needs to be understood.
The goal remains the same: be compliant with KYC regulations while streamlining the customer experience and staying competitive. As part of an overall technology strategy, issuers and financial institutions should implement low-code technology that bolsters innovation without increased costs.
This software builds itself, giving managers of customer onboarding and KYC functions the visual tools to configure unique nuances using business metaphors that automatically generate the code and the user experience. Visual models can help noncoders design and architect applications as well as manage integrations. Low-code regtech allows the different business, IT, and compliance teams to collaborate and test new ideas to rapidly assess potential outcomes. The processes to adapt to new regulatory requirements or emerging risks can go from months to minutes.
We are already seeing organizations adopting low-code solutions to support front-to-back-office client onboarding and KYC transformation through to offboarding. It’s a revolutionary idea: delivering results through configuration only in a low-code environment, modifying KYC rules in minutes, and re-rendering the UI/UX.
Technology such as AI to automate and undertake more predictive analytics is crucial to driving business intelligence and learning. But its value to KYC and onboarding process improvements comes with caveats and limitations, and they are most useful when controlled and managed within a true end-to-end process. AI without controls increases risk. Robotics can provide automation to manual tasks and auditability, but again, there are limitations and risks if not controlled. Control and transparency are critical to driving benefits, while mitigating these risks. Robotics and AI must be inherent in the control structure within end-to-end customer-life-cycle management (CLM) and KYC technology to mitigate and manage risk, with full transparency.
If issuers and financial institutions can use fully unified and easily accessible technology to meet complex KYC regulatory requirements, this provides a global and digitized client experience and drives digital transformation of end-to-end CLM. The combination of industrial-strength and unified client onboarding, KYC, offboarding, regtech solutions, AI and robotics can enable global banks to drive rapid results out of the box, while staying ahead of the competition.
