New technology platform cuts operational KYC costs 40%

30 July 2020 2 min. read
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International consulting firm Delta Capita has launched a new platform that according to the firm can help banks lower their KYC operational costs by up to 40%. According to the firm, it could mean millions of pounds in savings every year for clients.

The Know Your Customer (KYC) guidelines in financial services require that professionals make an effort to verify the identity, suitability, and risks involved with maintaining a business relationship. While the rules are designed to help banks mitigate the risks at the heart of their trade – especially in regards to battling money laundering – they have also place huge pressures on the industry.

The number of contact points required to reach out to a customer make KYC an extremely onerous process, for one. On average, a financial organisation has to reach out to a customer about eight times in order to fulfil the KYC requirements. At the same time, the lengthy process to comply with the guidelines mean that banks are sinking huge amounts of capital into their KYC efforts. Some major financial institutions spend up to $500 million annually on KYC and customer due diligence, according to Thomson Reuters, while 10% of the world's top financial institutions spend at least $100 million annually on it.

In an era of one-touch banking, the cost and effort behind KYC compliance is simply unsustainable. In response, however, a growing number of digital solutions are launching to help financial organisations cope with the strain. The latest of these is Delta Capita’s customer lifecycle management (CLM) platform, Karbon, which aims to speed up the process of gathering information and decision making from days to minutes, and reduce a bank’s operational costs by as much as 40%.

Former HSBC executive Gary McLure is now Head of Delta Capita’s CLM business. Commenting on Karbon’s launch, he said, “Until now, a typical bank analyst has spent far too much time gathering information on the suitability of current and potential clients.”

“Our new Karbon platform structures data in a way that means analysts can focus their efforts on carrying out detailed due diligence on company data, adding real value to the analysis, instead of spending much of their time inputting data into a system.”

In its work as a global consultancy, Delta Capita advises banks on how to organise KYC optimally – and the firm has applied the expertise accrued from that role in Karbon. The platform provides automated sourcing and aggregation of client information, with on-going monitoring enabling perpetual KYC. This capability combined with its configurable workflow, rules, screening and reporting, ensures that anti-money laundering prevention is significantly enhanced. The Karbon solution is part of Delta Capita’s strategic managed services strategic suite of offerings including structured products, pricing and risk, and post trade services.

Joe Channer, Chief Executive Officer at Delta Capita, remarked, “Following Delta Capita’s success in bringing to market several recognised industry managed service solutions, I am delighted at the launch of Karbon, which reinforces our drive to provide innovative capital markets technology, enabling utility efficiencies and cost mutualisation.”