Know your customer (part 2 of 2)

In the first part of this post [open article here] we outlined two key areas for carrying out a successful KYC review. In the second part we take a look at four other key aspects.

Point 3: Communication strategy

You should have a clear focus on the necessary communication measures and tools, particularly with compliance projects, since customer service often needs to have direct access to the end customer to gain further information. Professional grounds are often the decisive factor which determines whether a customer will collaborate straight away or whether they will be evasive, forcing customer service to make assumptions in some cases.

Which areas are particularly important here?

In-house communication

  • Project presentation using a town hall or a kick-off meeting: The organisation and the relevant stakeholders should be aware that there is something forthcoming. That is why project sponsors often present projects in a town hall or a kick-off meeting and underline the importance of the project (tone from the top).
  • Project reporting: Project reporting is handled by the project manager or the project management office (PMO), ensuring the hierarchical levels are aware of progress, but also that problems and risks of the project and deviations are identified ahead of time.
  • Newsletter: A regular newsletter is a good way of keeping stakeholders up to date and to acknowledge special (project) milestones.
  • Informal exchange: The project sponsor or manager should maintain ongoing informal exchange with individual stakeholders.

Communication between RM and end customer

  • Customer letters: Customer letters can help in establishing communication with the customer. This can ensure that customers are informed beforehand that their customer advisor will be contacting them for further questions, meaning any (undesired) surprises are avoided.
  • Talking points/handling objections: These serve as an aid for customer service and should help when handling difficult issues.
  • Termination notice: In the event that a customer is unwilling to fulfil regulatory requirements, a termination notice may be required.

Point 4: Training & support

To ensure that the KYC project runs as smoothly as possible, employee training is indispensable. However, the scope and the target groups are determined solely by the type of project. In the case of an annual review, summarising the most important changes to the KYC standard and distributing them within the company via a factsheet will suffice. For larger projects it may be useful to brief customer service in detail. In any case, you should ask yourself the following questions:

  • Training for compliance: What training do compliance employees require to ensure the review of KYC adjustments can be implemented efficiently and with consistent quality? Are factsheets, case reviews or coaching required?
  • Training for customer service: Are there any changes or challenges that require special attention from customer service? As well as the training measures, will front office support staff be required to provide coaching?
  • Implementation support: What form will implementation support take if customer service has specific issues with regard to implementation? Are there dedicated compliance or project staff who can help with this? Are additional resources from the first line of defence available if need be?

Point 5: Software support

Software support is an issue which is often not given enough attention, although it can contribute significantly to the success of a project. For example, if the KYC standard is not accurately implemented in the KYC tool, workarounds may be necessary, which should in turn be documented. This adds additional complexity when it comes to registering and reviewing the customer file, which in turn impacts the implementation timeframe and budget.

The choice of software – Excel, a SharePoint or an in-house IT solution – often impacts projects too. This can pose additional risks, such as IT resource availability, resources with a software vendor, adaptation speed in the event of changes. That is why it makes sense to think carefully about the most suitable software in advance. Generally speaking, you should try and keep complexity to a minimum here and ensure that progress monitoring is supported with the necessary data.

Point 6: Progress and deviation monitoring & quality management

In our blog post from February 2021 (The relevance of progress monitoring in KYC data cleansing projects) we delved into the topic of progress monitoring in detail. To recap the basic principle: progress monitoring is the Achilles heel when it comes to timely project completion. In the case of KYC projects, in particular, customer files generally vary in terms of quality, complexity and the associated challenges. As such, it is important for overall progress that you continually measure the progress of interim objectives, and that you quickly rectify deviations.

In addition to progress, it is also important that you review the quality of the customer files being processed on an ongoing basis. This ensures that failings are discovered before the end and that they can be rectified ahead of time. After all, carrying out work a second time is far from opportune in any project.

Good planning = successful project

If you plan your project around these six key success components, you will have laid the essential groundwork for a successful outcome. The art is in finding an optimal balance between quality, cost and time. And the crucial factor: extensive experience in implementing KYC projects – and dealing with their idiosyncrasies.