Frictionless KYC is just like a good rugby referee


The best refs apply the rules expertly and stay in the background, the same as critical Know Your Customer controls, says Luke Ashley, Business Development Director at TruNarrative.

The fans don’t notice the best rugby officials. After England have played France in Paris to conclude the Six Nations rugby championship this year, people won’t be talking about the referee’s performance in the bars of Saint-Denis if the ref has done a great job. That means allowing a free-flowing and fair match with the rules expertly applied in the background. In the world of work, the same can be said for the best business software, including know your customer (KYC) controls.

Leading anti-money laundering (AML) and KYC solutions are business-critical in financial services. Recent shifts to digital banking and remote sign-ups, speeded up by the pandemic, have opened up vulnerabilities, and criminals have been swift to take advantage. Those businesses without adequate processes to check the veracity of customers risk being subject to heavy fines and hits to reputation.

Consider the Financial Conduct Authority (FCA) revealed, in December, it had meted out a record £568 million in fines in 2021 – including £265m for NatWest, £147m for Credit Suisse and £64m for HSBC. That was almost triple the 2020 figure of £192m.

A free-flowing and fair experience

Poor KYC controls can put too many barriers in place, making onboarding so convoluted that customers go elsewhere. Imagine a frustrated TV viewer switching over from rugby to football if there are too many stops, starts, and unnecessary interventions by the person with the whistle. But this ease-of-access and a near-seamless journey has to be balanced against the compliance demanded by regulators, and to minimize risk.

Historically, and until recently, to open a bank account, new customers would be expected to go into a branch with their passports, driving licences, and documents proving addresses. Today, the latest market-leading solutions use various data sources to speed onboarding online. Technology can perform all the necessary checks in the background and verify a UK resident for an online trading platform in just a few seconds, for example.

One of the first checks that a financial services business requires is a risk rating based on the application criteria that the customer provides. This might include employment status for example, or country of origin, nationality, residency: all these factors create a personalised score. The company would then check Electronic Identity Verification (eIDV) data points, and for those wanting another layer of KYC, the customer could be asked for a document and biometric check. This might be a smartphone selfie that matches a picture in a document.

Keeping up with rule changes

The best referees, such as Wayne Barnes or the recently retired Nigel Owens, ooze authority on the pitch and command respect from the players. And yet they are invisible, working their magic in the background. The KYC process is the same – when it’s done well, the customer doesn’t notice. And as with evolving rugby rules, KYC and AML regulations and guidance, as dictated by the FCA, change all the time. The responsibility lies with refs, and KYC systems, to keep pace and continuing applying the regulations in the background, so that the fans, or customers, don’t feel any friction.

There will be occasions when referees cannot decide on their own, and that’s when they must consult the opinions of their on-pitch assistants or the television match official. They draw upon other sources of intelligence, or data points, to make the best decision. A good KYC process does precisely the same. At TruNarrative, we have access to over 50 different data sources such as credit reference data, PEP and sanctions data, as well as document verification to name but a few.

Finally, the best referees are able to explain their decisions clearly, and it’s the same with KYC too; there is a transparent audit trail so that regulators and customers can see how financial services companies made their decisions. In that bar in Saint-Denis, no one wants a bad taste in their mouth because a poor ref performance spoiled the match.

Speak to Luke about how our solution can help you balance frictionless customer onboarding with meeting your regulatory requirements. Request a demo below.