Banking and financial institutions all across the world offer a lot of financial products, including consumer loans, credit cards, debit cards, and saving accounts. Before leveraging any of the products offered by a banking institution, a user or customer has to open an account. And in the banking institution, opening a bank account is not a simple or fast task. There are many friction points between the bank and the customer during this process, which is notoriously difficult and sometimes painful.

Opening a bank account process in the banking organization goes through a series of steps starting from gathering onboarding requests, data extraction and verification, account setup, tracking, and data archiving, and at last, sharing the details with users and customers. As per the Deloitte report, banking organizations spend almost 20-90 days typically to onboard a new client. So how can banking organizations leverage technologies accelerate the KYC process?

Let’s understand more in this blog how automating the KYC process helps accelerate the account opening process for customers as well.

What is KYC in the Account Opening Process?

In the banking organization, KYC refers to the process of identifying the individuals and organizations with whom banks do business and confirming their identity to verify they are acting legally. Customers or users often share multiple KYC documents like AADHAAR, driving license, passbook, and other identity proof for the account opening process. Then further, banking service staff have to deal with a large number of data extraction and processing KYC documents for verification before opening an account. A number of account openers revoke their willingness to open the account due to the numerous iterations that the account opening process involves.

Challenges with Manual KYC for Account Opening Process

Manual processing of KYC documents brings forth a lot of challenges for banking and financial service desk agents. Some of the manual KYC challenges include-

Manual KYC Challenges

  1. Time-consuming

    Processing KYC documents manually is time-consuming due to the involvement of high-volume document collection and verifying them before processing them further.

  2. Prone to Errors

    With a high volume of KYC documents, checking them with minute details and entering the data in the system is challenging. On top of that, the KYC data comes in an unstructured format that makes it highly prone to errors

  3. Increased Risk of Fraud

    But using manual effort in the KYC process, it is easier for fraudsters to slip through the cracks if the process is not thorough or if it is not adequately monitored.

  4. Customer Inconvenience

    Customers might find it inconvenient if they find that opening an account in the bank is taking longer than the required time due to data processing challenges. And if they had to be present physically to verify each document, then the customer experience is doomed.

  5. Costly

    Manual KYC processes can be costly as well if a lot of manual effort is used in processing the data. As per Deloitte, banking and financial organizations have lost $25000 due to dealing in customer account opening.

Overall, manual KYC processes can be inefficient, error-prone, and inconvenient for both businesses and customers. In order to overcome these challenges, KYC automation can help improve efficiency and reduce the likelihood of errors and fraud during the KYC process.

How does Embedding RPA in KYC Accelerate Account Opening Process?

Using RPA in Banking (robotic process automation) for KYC (Know Your Customer) can speed up the account opening process if manual data entry is reduced and paper documents are de-emphasized. RPA combined with AI technologies like Machine Learning(ML), OCR, and NLP enable banking service desk agents to extract information from KYC documents that are in an unstructured format like PDF, images, photos, and others. Intelligent document processing solutions convert unstructured data into a structured format and rule out the need to process it manually in KYC automation.

Due to the lack of paper documents to mail or manually enter into the system, the account opening process can be significantly streamlined. RPA can be leveraged in multiple steps of the KYC process that help banking service desk agents accelerate the account opening process. RPA can help in automating-

  1. Data Entry

    In this step, RPA can be programmed to extract data from electronic documents such as AADHAAR cards, driver’s licenses, utility bills, and others. Using RPA banking, employees can extract the details and enter them in the appropriate field in a digital form or database. This further reduces manual errors and makes it easy for employees to accelerate the account opening process.

  2. Data Verification

    This is another step in the KYC process that can be automated using RPA to verify the authenticity of KYC documents by comparing them to original resources by using OCR technology.

  3. Compliance Maintenance

    Automated compliance checks can be programmed to verify that a customer meets the requirements for opening an account, for instance, or to check against sanctions lists.

Benefits of RPA in KYC Process for Account Opening

  • Improved Due Diligence

    By automating high volumes of documents, RPA bots can easily extract data, index it, and upload it into the compliance system to assess risk and all without human intervention.

  • More Accurate Customer Risk Profiles

    It is possible for financial institutions to utilize automated software bots instead of sending customer identification profiles (CIPs) to be validated externally, thus saving time and money and reducing errors. RPA Bots can also be assigned to track the data and identify the incomplete and inconsistent information present among documents.

  • Better AML Screening and Investigation

    RPA bots can continuously monitor data and send an alert when potentially fraudulent or criminal behavior has been identified and make sure that any other further problem doesn’t arise. Also, with RPA bots, banking employees can better maintain KYC compliance. All in all, with KYC automation, the risk assessment got better.

[Also Read – What is RPA in Banking and Finance ? Use Cases, Benefits, and Challenges in 2023]

AutomationEdge Ready Workflow(Solflo) for KYC Automation

AutomationEdge-ready workflow is one such solution that makes the KYC automation a lot easier. As a banking organization if you are still worried about risk associated with automation technologies, then these ready workflows can be your choice. With AutomationEdge ready workflow you get-

  • Ready workflow as per your business requirement
  • Process automation without upfront cost’
  • No extra cost for maintenance
  • Pay per transaction pricing model

To know more about AutomationEdge-ready solution workflow, click here.

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