The relevance of progress monitoring in KYC data cleansing projects

As well as the obvious success factors in KYC data cleansing projects (such as the team’s expertise), less obvious factors can also contribute significantly to the success of a project like this. One is monitoring the progress of the project itself, in order to ensure that nasty surprises are avoided in the later stages of the project. It also gives supervisors and their stakeholders an optimum overview of the project status at all times. In the following, we take a look at some of the most important elements in progress monitoring.

The KYC data cleansing process with external compliance experts

As a key starting point, it helps to set out the actual KYC cleansing process, given that this is the basis for what will be measured later using progress monitoring. Roughly speaking, we generally assume the following project steps:

  1. The scale of the KYC data cleansing is defined and preparatory measures undertaken (e.g. coordination with stakeholders).
  2. Customer service revises the KYC with the customer.
  3. The project team – consisting of internal and external compliance specialists – validates the KYC and asks for further information if anything is unclear.
  4. The internal Compliance department checks the quality of the project team’s review in its entirety or on a random sample basis.
  5. The case is closed, or if necessary (e.g. customer exit) further bank-specific processes are initiated.

These processes do not always progress linearly. There are often several iterative interactions – in particular between the project team and customer service – that require systematic follow-up. And during the KYC data cleansing process, it's possible that some customer relationships might be partially lost or process steps missed out. An example of this is if the customer file has to be dealt with separately by internal compliance specialists.

Key elements of the progress review

From this, we can derive the following four key elements, which should form the crux of any progress monitoring.

  1. Scale of the KYC data cleansing (e.g. number of accounts):
    Although a basis is defined at the start, it goes without saying that this can change over the course of the project, due to e.g. account closures, bank relationships, inactive accounts, etc. It makes sense that the scale is reviewed again in every reporting period and the change and its reason indicated in the qualitative design.
  2. Progress per unit of time (e.g. accounts completed per week):
    This key figure aids rolling planning and enables an estimation of the remaining project time and the associated costs. It also provides an effective overview of the current progress for any potential project sponsor, project management and stakeholders. It may be helpful to sub-divide further; for instance, by complexity, which is often determined on the basis of risk classification (PEP, at-risk customers). Examining the progress of each individual process or team can also prove useful, enabling the necessary process improvements or training measures to be detected and initiated at an early stage.
  3. Work backlog per process step (e.g. number of cases dealt with by customer service):
    Since process steps sometimes have to be repeated more than once and involve various different actors, it makes sense to measure the work backlog for each process step. This can indicate whether additional resources might be needed, whether training and efficiency measures are required, or whether the scale of the review should be reduced. A positive trend will then become apparent when the work backlog is minimised and specific work packages can be created for subsequent processes.
  4. Cases with a longer processing time (e.g. customers with a deposit box):
    Progress made at customer file level is often ignored; for instance, sometimes complex cases can show no progress for extended periods. One conceivable reason may be a failure on the part of customer service to reach the customer. However, delays may also occur if a decision is required from Compliance Senior Management. Such cases should be highlighted/made transparent, so that measures can be taken ahead of time here too. If this transparency is lacking and such cases emerge only at the end of the project, it may have major implications for the conclusion of the project.

Progress monitoring is a must

Whether several hundred or several thousand customer files are being processed, structured and sensible progress monitoring can help you improve transparency and reduce the risks of a KYC data cleansing project.