As the financial landscape evolves, speed and customer satisfaction are becoming critical aspects of AML (Anti-Money Laundering) and KYC (Know Your Customer) processes. In 2024, the emphasis is no longer solely on compliance; the customer experience during onboarding is now a key differentiator for financial institutions (FIs).

In a digital-first world, financial institutions need to strike a balance between rigorous regulatory checks and delivering fast, seamless experiences to retain and attract customers.

Recent consumer research from our strategic partner FullCircl underscores this shift, revealing the critical need for FIs to optimize their onboarding processes. The findings show that customer impatience with slow verification processes can be a significant barrier to conversion, driving the need for both automation and manual verification when necessary.

Emerging Trends Shaping Customer-Centric AML and KYC Processes

As technology, regulations, and customer demands evolve, financial institutions must adapt to a rapidly changing environment. Several trends for 2024 emphasise how FIs can meet compliance requirements while delivering an enhanced, efficient onboarding experience.

1. Speed is Key: Fast and Frictionless Onboarding

In today’s digital age, consumers expect near-instant access to financial services, and this is particularly important during onboarding. FullCircl’s research found that 70% of consumers are unwilling to spend more than 10 minutes on the account-opening process. For financial institutions, this means that lengthy or cumbersome KYC processes are no longer acceptable.

Automating the KYC process is crucial to meeting these expectations. However, there are situations where manual verification and enhanced due diligence are necessary, such as when dealing with higher-risk individuals or businesses. This is where a partner offering manual verification services can play a vital role, ensuring that while speed is prioritized, compliance and accuracy are not compromised.

2. Enhanced Due Diligence: The Role of Manual Verification

While automation and digital identity verification (IDV) tools are central to speeding up onboarding, there are cases where manual intervention is required, particularly for enhanced due diligence (EDD). Certain customer profiles or transactions may trigger the need for deeper scrutiny, and having a reliable manual verification process in place is crucial to ensure compliance without sacrificing the customer experience.

FullCircl’s research indicates that 47% of consumers have undergone digital identity verification in the past 24 months, and while many expect this process to be quick, some cases require additional checks that automated systems alone may not handle effectively. A hybrid approach—combining automated solutions with expert-led manual reviews—allows FIs to address potential red flags while keeping the customer journey smooth.

Customer Satisfaction: The Cornerstone of Modern Compliance

FullCircl’s research emphasizes that customers today expect more than just compliance from their financial institutions—they want transparency, ease, and speed. In fact, 50% of consumers who abandoned an account opening process did so because it took too long. This finding highlights the importance of streamlining the onboarding process while providing clear communication throughout the journey.

To meet these expectations, financial institutions must adopt a dual approach—employing technology to handle low-risk cases quickly and implementing enhanced manual verification for more complex scenarios. This ensures a positive customer experience while maintaining the integrity of the compliance process.

The Importance of Flexibility in Verification Methods

Customer preferences vary when it comes to how their identities are verified. FullCircl’s research found that 59% of consumers would feel more comfortable if they had the option to choose their verification method. Offering flexibility—whether through digital ID checks, biometric verification, or manual document review—can improve the overall onboarding experience, enhancing customer satisfaction and trust.

By partnering with experts who provide manual verification services, FIs can ensure that every customer, no matter their risk level, receives a personalized and efficient onboarding experience.

Navigating Regulatory Complexity Without Compromising Customer Experience

The regulatory environment around AML and KYC is becoming more complex, and financial institutions must ensure they stay compliant while also meeting customer expectations. 35% of risk executives surveyed believe that compliance and regulatory risk pose the greatest threat to their company’s growth, underscoring the need for FIs to invest in both cutting-edge technology and manual verification processes that can handle intricate compliance requirements without causing delays.

Manual verification plays an important role when more nuanced, high-risk cases arise. Enhanced due diligence, conducted manually, ensures that potential risks are thoroughly evaluated, safeguarding FIs from compliance violations while keeping customer satisfaction intact.

Tools and Solutions for Optimizing the Onboarding Experience

To strike the right balance between speed, satisfaction, and compliance, financial institutions are turning to a combination of advanced tools and manual processes. The most effective solutions include:

1. Automated KYC Software
   Automated KYC solutions allow FIs to verify and authenticate identities quickly and accurately. With 70% of consumers unwilling to spend more than 10 minutes on account opening, automated tools help reduce the time it takes to comply with regulations. However, when additional checks are needed, manual verification ensures the accuracy of the process without interrupting the customer experience.
2. Manual Verification for Enhanced Due Diligence
   When onboarding higher-risk customers or dealing with complex scenarios, automated systems alone may not be sufficient. Manual verification, especially during enhanced due diligence, ensures compliance and provides the human oversight necessary to navigate nuanced cases while maintaining a smooth customer journey.
3. Digital Identity Verification (IDV)
   Leveraging biometric verification and other advanced technologies for low-risk customers accelerates onboarding. However, giving customers flexibility in choosing their preferred method of verification, including manual review, ensures a comfortable and secure experience for everyone.
4. Ongoing Monitoring and Perpetual KYC
   Continuous monitoring of customer profiles helps FIs detect any changes in risk levels, allowing them to react quickly. This ongoing monitoring also reduces the need for repeated verification, enhancing the customer experience and maintaining regulatory compliance.

Building Trust Through Transparency and Security

In today’s financial landscape, trust is a key differentiator. FullCircl’s research reveals that 70% of consumers trust traditional banks over other financial platforms, highlighting the importance of security and transparency. By openly communicating their security protocols and offering clear, easy-to-understand onboarding processes, financial institutions can build trust with their customers.

How FullCircl and Dialect Can Help

As AML and KYC processes continue to evolve in 2024, financial institutions that prioritize speed, customer satisfaction, and compliance will be better positioned to thrive. By integrating FullCircl’s cutting-edge solutions with manual verification services, FIs can ensure efficient onboarding, handle enhanced due diligence seamlessly, and build stronger relationships with their customers.

If you’d like to learn how FullCircl and our manual verification partner can help redefine your AML, KYC, and KYB strategy, book a demo today.

As the regulated framework related to customer onboarding is complex, achieving accurate compliance in this process requires a combination of advanced automated technology and the integration of human touch offers direct support and expert analysis.

FullCircl and Dialect’s hand-in-glove approach to automated KYC and KYB checks facilitates fast and frictionless customer onboarding which ensures compliance with regulatory requirements.

If you want to find out more about how we can twin this with our IDV partner to provide a fully end-to-end solution to enhance your customer onboarding process, drop us a line at hello@dialectcommunications.com