One of these trends in financial services is that the magnified awareness and adoption of robotic method automation (RPA). RPA will be utilized in any method among your financial organization, however, if you're looking to urge on board, an honest place to begin is yours recognize your client (KYC) method. However, there are many factors to think about before deciding to implement RPA. Let's take a glance at what you would like to grasp concerning RPA within the context of your KYC method.
How RPA Works With The KYC method:
KYC may be a key a part of a good anti-money-laundering (AML) framework and mandates that a bank perform client due diligence to make sure they're not facultative money crimes to occur. for many financial establishments, the KYC method may be a series of routine and repetitive procedures across totally different customers that are being boarded. In some larger financial establishments, the tasks are even continual across totally different departments that handle the identical client. These mundane tasks include:
- Screenings of the customer, beneficial owners (the human person who owns and/or controls a legal entity customer) and other related parties (e.g., business associates)
- Performing customer due diligence using a set of publicly available tools or trusted sources
- Inputting data into a KYC system
- Setting up the customer in non-KYC-integrated downstream systems
Other highly manual or repetitive processes with little outside dependencies such as these could be candidates to consider for RPA as well.
How Can RPA Help?
Screening is the process of searching for news, sanctions or other factors that may indicate a heightened risk of doing business with a particular customer. The KYC analyst may be performing the following steps for every beneficial owner, controlling the party and related party for each new customer being onboard:
1. Identify all parties
2. Input related parties, one by one, into an online screening tool
3. Download PDF of search results
4. Upload the PDF and screening results into the KYC system
5. Review and disposition the screening hits in the KYC system
In this small situation, RPA has the potential to optimize the repetitive aspects of the screening method, such the KYC analyst just must initiate the RPA method, and during a matter of seconds, the bot can mechanically execute the primary four steps of the method. The associate can then be able to begin step 5 with the screening results PDF open and an audit path out there to look at pro re nata. The audit path also will be key in demonstrating the effectiveness of this method to internal audit and regulators.
The main advantage of RPA during this situation is that the KYC analyst will direct their efforts toward the performance of analytical functions, therefore enhancing the standard of the KYC files. Additionally, to reducing KYC interval, RPA can even cut back the prospect of human error and improve the standard of work in every file.
How will RPA Hinder?
Despite the potential benefits of RPA, there are some factors that you simply ought to weigh against before deciding to induce on board, such as:
Cost: prices will vary counting on the number of KYC files, complexness of your KYC method and also the extent to that you implement RPA. There are direct implementation prices moreover as in progress licensing and maintenance prices. For this reason, smaller or less complicated KYC processes might not be financially viable or could have longer payback periods.
Job Security: Inevitably with RPA comes the question: "Will the larva replace my job?" you want to contemplate if the culture of the financial organization, moreover as coaching, is powerful enough to educate KYC analysts on their roles within the post-RPA landscape.
Effectiveness: associate RPA implementation takes diligent designing, scoping and documentation, moreover as neutral buy-in, to achieve success. If, for instance, a scarcity of direct time and resourcing investments leads to the larva being scoped to alter solely steps one through 3 higher than, going away the KYC analyst to transfer files manually, RPA won't be as effective as what was pictured.
While RPA has the potential to hurry up processes by removing the robotic tasks from the plate of the human analyst, there are monetary and operational risks that include implementing it. If you choose to proceed with RPA, consider the KYC method as a pilot given its manual nature and lack of dependencies on different processes. If enforced with success, you'll take your RPA decision-making method to different routine manual processes across your organization.