Within the financial services space, digital identity has proven transformative for retail banks by significantly enhancing customer experience and, consequently, commercial outcomes. However, for corporate, commercial and investment banks, there have been unique challenges to contend with when it comes to its implementation, meaning these institutions are yet to grasp the opportunity to accelerate growth and, ultimately, profitability.

Why? Factors such as a lack of unified corporate identity standards, transparency and access to business information represent hurdles that, despite efforts including increasing headcount and building homegrown solutions, have been challenging for institutions to overcome.

Amidst a backdrop of economic turbulence, the time for change is now. Banks simply must overhaul their approach to the identification and verification of corporate and institutional clients with Corporate Digital Identity (CDI) if they are to maximise efficiency, satisfaction and power the path to growth.

Embrace CDI to revolutionise the KYC process

CDI revolutionises the process of Know Your Customer (KYC), with cost-effective and efficient output front of mind. Combining real-time data in the public domain with data acquired from clients privately, it delivers ready-made customer profiles into internal systems. This unlocks new operating models that can greatly enhance the speed and accuracy of onboarding, to the benefit of both the bank and the customer.

Crucially, with compliance in mind, CDI profiles also contain all attributes and documents needed to make and evidence sound customer decisions.

Until now, without a unified picture of customers, banks have been forced to build their own profiles from a mass of disparate data to conduct KYC. When approached manually, this is expensive, with processes open to the risk of human error. Banks have also tried, and often failed, to build their own internal solutions, as these complicated, long projects stall or halt due to limited resources, a lack of skills or competing business priorities.

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The inefficiency of this means that many businesses wait up to 120 days for access to accounts and services, which often leads to them abandoning a friction-filled application process – costing a total of $3.3trn in lost revenue.

CDI, on the other hand, facilitates a smoother, faster onboarding process, which, in turn, allows banks to increase customer satisfaction, reduce abandon rates and reap a multitude of broader business benefits.

Putting the customer at the heart of the process for full benefits

Generated from the most up-to-date and authoritative public and private data sources, CDI ensures that banks are provided with a consistent and accurate view of the customer at all times. This view ensures robust regulatory compliance procedures that put customers at the heart of the experience. The improved customer experience that underpins its core leads to reducing abandon rates during the onboarding process by 20% to 40%, further driving profitability.

With complex and disparate information distilled into a digestible profile that persists through downstream activities, CDI brings clear benefits for a number of organisational areas.

From the front office – that sees instances of client outreach reduced from an average of five to two times with CDI – to compliance, embarking on this technology-led transformation has the potential to drive efficiencies that translate into $700m across a global bank over a five-year period.

While more than a third of this is projected to directly benefit operations, the cross-functional impact of CDI is undeniable, with 11% of the overall value expected to come within the front office, 14% in compliance, and almost 20% across technology and data.

Setting up for future growth gains

CDI marks a shift in the way corporate customer onboarding and identity verification is tackled that will alter the future – and supercharge gains at play – for banks and financial institutions the world over.

As well as improving compliance outcomes, it also allows for the building of processes that truly put revenue building opportunities and long-term growth front and centre.

As we are well aware, traditional KYC poses several significant challenges, making this evolution inevitable. In today’s market, where growth is paramount, every bank wants to do business faster and better – and it is CDI that will allow them to realise full potential in an impactful and sustainable way.

Alex Ford is President, North America at Encompass Corporation