Improving the KYB process for a fast-growing Fintech to reduce the time taken to onboard new clients and increase revenue

Nexus AML was approached by a ‘Banking as a Business’ provider to review and define their customer due diligence processes. The client was missing fundamental structures in their KYB and intermediary compliance department and required a review with recommendations for improvement to reduce a problematic backlog and to improve their overall quality of work.

Challenge

The client had an inexperienced team working with underdeveloped Know Your Business (KYB) protocols; rapid growth and departmental restructuring meant that they had no policy and procedure guide, no record keeping, inefficient inter-departmental communication, and no clear definition of requirements. Nexus AML was approached to provide expert management consultancy to streamline the client’s onboarding process. As the processes in place were based on individual staff member’s experience and opinions, there was a significant challenge for Nexus AML to manage the integration of process-wide improvements.

Key Highlights

Defined and documented the KYB regulator requirements for both UK & EU entities

Short, medium, and long-term solutions to improve quality standards and increase output

Contributing to a collaborative environment

Weekly consulting reports

Acted as interim ‘Head of Due-Diligence’

Capturing and documenting the population of applications currently ‘live’ and applying stage categories

Solution

Nexus AML’s management consultancy focused on creating a business-wide record of what KYB

requirements are in line with UK and EU regulations. In close collaboration with Money

Laundering Reporting Officer (MLRO) and compliance teams, Nexus AML successfully created a

guide to be used and referenced by all stakeholders within the compliance lifecycle.

With no clearly defined

record keeping, the client

was experiencing issues

with tracking customer

lifecycle and relationships

Nexus AML fixed this by defining a structure to be followed by the KYB

team to streamline the process and enable a more

collaborative working approach. It became clear that this was

a pain point within the client’s onboarding department as

previously there was insufficient communication and therefore

understanding between internal teams.

Within the client compliance team, processes could be disordered due to differentiating requirements for UK and EU clients

It was a key objective of Nexus AML to clearly define the requirements for entities based in either region. This involved working in closer collaboration with the MLROs and organising regular calibration meetings with different stakeholders with a pre-set agenda and recording the decisions made to enable consistency of work.

Nexus AML provided regular consultation reports to identify why things were taking so long, where areas needed fixing most urgently, with a detailed list of key factors followed by key recommendations.

A full comprehensive review of production quality was a principal factor in identifying inefficiencies and key factors that were contributing to excessive delays experienced by the client’s customers.

Before Nexus AML’s relationship with the client, a backlog of 9 months' worth of aging applications was increasing daily and adding pressure to front line teams. Customers were regularly complaining that their applications were not being processed. Following Nexus AML’s consultation period, this backlog had been reduced to just 3 weeks, and set to deplete completely following the changes recommended. 90 customer onboarding applications were stuck, including a sum of duplications which were not identified at onboarding. This number had been reduced to just 36 due to the changes made alongside the introduction of Nexus AML-supported automation.

Overall, the client was struggling at several key points of their onboarding process, and as a result were failing to stem the tide of an increasing backlog of aging customer applications and quality concerns. Thanks to Nexus AML’s management consultancy expertise, the client’s KYC (Know Your Customer) onboarding process had been successfully redesigned and managed to ensure it operated as required. The client’s customer’s now benefit from a much quicker service, with a more consistent and clear approach.