{"id":101056,"date":"2021-12-08T07:00:08","date_gmt":"2021-12-08T07:00:08","guid":{"rendered":"https:\/\/feedzai.com\/?p=101056"},"modified":"2024-04-09T09:17:52","modified_gmt":"2024-04-09T09:17:52","slug":"how-banks-can-improve-the-customer-screening-process","status":"publish","type":"post","link":"https:\/\/feedzai.com\/blog\/how-banks-can-improve-the-customer-screening-process\/","title":{"rendered":"How Banks Can Improve the Customer Screening Process"},"content":{"rendered":"

[vc_row row_height_percent=”0″ override_padding=”yes” h_padding=”2″ top_padding=”1″ bottom_padding=”2″ overlay_alpha=”50″ gutter_size=”3″ column_width_percent=”100″ shift_y=”0″ z_index=”0″][vc_column width=”1\/1″][vc_row_inner][vc_column_inner width=”1\/12″][\/vc_column_inner][vc_column_inner width=”10\/12″][vc_single_image media=”101058″ media_width_percent=”100″ uncode_shortcode_id=”105813″][\/vc_column_inner][vc_column_inner width=”1\/12″][\/vc_column_inner][\/vc_row_inner][vc_row_inner][vc_column_inner column_width_percent=”100″ gutter_size=”3″ overlay_alpha=”50″ shift_x=”0″ shift_y=”0″ shift_y_down=”0″ z_index=”0″ medium_width=”0″ mobile_visibility=”yes” mobile_width=”0″ width=”2\/12″][\/vc_column_inner][vc_column_inner width=”8\/12″][vc_column_text uncode_shortcode_id=”986977″]Listen to How Banks Can Improve the Customer Screening Process<\/em> (7 min):<\/p>\n\n

[\/vc_column_text][vc_custom_heading heading_semantic=”h3″ text_size=”h3″ text_weight=”400″ uncode_shortcode_id=”146315″]When you think about it, the customer screening process for banks is a lot like a blind date. Banks don\u2019t really know who they’re meeting, and the provided picture ID might be as fake as a Photoshopped online dating profile. If banks aren\u2019t careful, they could give money launders a safe haven. And the fallout will be much more serious than the awkward question of who picks up the check. Here\u2019s how banks can enhance customer screening and onboarding workflows and stop criminal enterprises from accessing financial services.<\/span>[\/vc_custom_heading][vc_column_text uncode_shortcode_id=”555748″]<\/p>\n

The Trouble with Customer Screening<\/span><\/h3>\n

To better understand why customer screening is so vulnerable, it first helps to delve into the different components of the customer screening process. This process involves checking customers against sanctions lists, politically exposed persons (PEPs), relative or close associate (RCA) status, and for adverse media.\u00a0<\/span><\/p>\n

Banks understand that for every 100 customers screened during onboarding, only a small share (one or two) will raise red flags and could be blocked entirely from accessing the bank\u2019s services. But banks could lose revenue from growing their business if legitimate customers experience too much friction during the screening process. For example, it can take between 20 to 90 days to onboard a new client. Banks can lose $25,000 in revenue per client because of these delays. According to <\/span>recent research<\/span><\/a>, the process can take even longer (up to 120 days) for corporate clients. Meanwhile, a <\/span>separate study<\/span><\/a> of major global banks found it can take between 24 to 120 clicks for a client to open an account.\u00a0<\/span><\/p>\n

Too many false positives after customers are onboarded can also be a headache. By some <\/span>estimates<\/span><\/a>, 95% of anti-money laundering (AML) system-generated alerts are deemed false positives after their initial review. These false positives cause AML teams to chase false leads – and help criminals remain undetected.\u00a0<\/span><\/p>\n

How Banks Can Upgrade Customer Screening Operations<\/span><\/h3>\n

These problems can carry serious consequences for banks. Banks can face significant fines if regulators discover that customers with links to organized crime, terrorism, and other crimes gained a safe haven in their organization. What\u2019s more, a bank\u2019s public reputation is at stake if these revelations are brought to light. The bank can lose customers who do not want to be associated with an FI that does business with criminal organizations or infamous figures.\u00a0<\/span><\/p>\n

Avoiding these outcomes begins with addressing the problems that plague a bank\u2019s customer screening process. Here\u2019s what banks can do.<\/span><\/p>\n

Invest in a Flexible System<\/span><\/h4>\n

The first step for banks to enhance their customer screening capabilities is to ensure their system is flexible enough to handle new data types and sources. In the AML compliance world, watchlists and sanctions lists are constantly in flux. New entities and individuals are always being added to sanctions lists for several different reasons. Banks need a customer screening system that is flexible enough to support new data points when they emerge, such as regions of the world that pose a greater AML compliance risk. Or if criminals find new methods to launder money. Any system banks invest in should be flexible enough to capture and score this data as it becomes available.<\/span><\/p>\n

Work with Reliable Data Providers<\/span><\/h4>\n

Banks need access to strong, reliable, external data providers to ensure they can perform their due diligence and customer screening. When a customer initially presents their address or date of birth, external data should quickly confirm or disprove it. Investigating whether a new bank customer is who they claim to be during the account opening process is a critical step in banks\u2019 efforts to bolster their AML compliance programs.<\/span><\/p>\n

Look for Opportunities to Boost Efficiencies<\/span><\/h4>\n

Working with external third parties can streamline the onboarding process so banks can confidently onboard trustworthy customers. But banks should also look at their internal operations for opportunities to enhance information-sharing. Too often, organizational silos emerge within a bank\u2019s workforce and break down communications. Aligning teams more efficiently enables automated data-sharing and insights across the organization that reduces financial crime and delivers a seamless customer journey.\u00a0<\/span><\/p>\n

Look for Automation Opportunities<\/span><\/h4>\n

Constant changes to sanctions and watch lists are challenging for any bank to monitor on a regular basis. Investing in automation can alleviate this burden. Banks need to look for solutions that automate important processes. By investing in automated solutions, banks ensure they are up to date on the latest sanctions lists, PEP and RCA data, and adverse media reports.\u00a0<\/span><\/p>\n

Focus on Reducing Customer Friction<\/span><\/h4>\n

Automated solutions are also essential for helping to reduce customer friction. Solutions that can automatically pull information during the onboarding process can help banks approve trustworthy customers faster. These same automated solutions reveal connections to high-risk actors and whether an applicant is on a sanctions list, a PEP, an RCA, or a few degrees removed from these players. Automated solutions can connect sanctioned individuals. The end result is reduced friction for trustworthy customers and additional friction for bad actors.\u00a0<\/span><\/p>\n

No bank wants to harbor sanctioned individuals or organizations or to enable money laundering activity connected to terrorism, illegal drugs, human trafficking, slavery, and other atrocities. The blowback will come in the form of regulatory investigations, heavy fines, and a badly damaged public image.\u00a0<\/span><\/p>\n

The good news is banks don\u2019t have to endure uncomfortable blind dates anymore. It\u2019s time to get all the facts on who is attempting to onboard with an organization from the moment an application is submitted.<\/span><\/p>\n

Digital trust is the foundation of today\u2019s connected economy. Watch the on-demand webinar <\/span><\/i>4 Key Elements of Digital Trust<\/span><\/i><\/a> to learn how banks can trust their customers in the digital age.<\/span><\/i>[\/vc_column_text][\/vc_column_inner][vc_column_inner column_width_percent=”100″ gutter_size=”3″ overlay_alpha=”50″ shift_x=”0″ shift_y=”0″ shift_y_down=”0″ z_index=”0″ medium_width=”0″ mobile_visibility=”yes” mobile_width=”0″ width=”2\/12″][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

When you think about it, the customer screening process for banks is a lot like a blind date. Banks don\u2019t really know who they’re meeting, and the provided picture ID might be as fake as a Photoshopped online dating profile. If banks aren\u2019t careful, they could give money launders a safe haven. And the fallout will be much more serious than the awkward question of who picks up the check. Here\u2019s how banks can enhance customer screening and onboarding workflows and stop criminal enterprises from accessing financial services.<\/p>\n","protected":false},"author":15,"featured_media":101067,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[75],"tags":[153,68,77,379,378],"acf":[],"yoast_head":"\nHow Banks Can Improve the Customer Screening Process | Feedzai<\/title>\n<meta name=\"description\" content=\"Here\u2019s how banks can enhance the customer screening workflows and stop criminals from gaining access to legitimate financial services.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/feedzai.com\/blog\/how-banks-can-improve-the-customer-screening-process\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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