Within today’s financial services landscape, where customers expect seamless access to products and services, lengthy and cumbersome onboarding procedures are proving costly for banks – across revenue and growth.
With research showing that many corporate treasurers (87%) have abandoned the banking application process because of friction created by Know Your Customer (KYC) requirements at onboarding, and throughout the customer lifecycle, this is clearly a problem that demands a solution.
Go deeper with GlobalData
Enter Corporate Digital Identity (CDI) – a concept emerging as the vital piece of the puzzle when it comes to navigating the challenge of identifying and verifying corporate and institutional clients while delivering an excellent customer experience.
Designed to be leveraged directly within internal systems, CDI ensures banks are provided with a consistent and accurate view of a customer when and where it is needed.
Elevating customer experience to facilitate growth
Celent research into trends in corporate banking in 2024 found that 50% of respondents agreed that it was now more challenging to win and retain customers than it was 12 months ago. It is clear, then, that it is more important than ever to move to stem the alarming rate at which applications are being abandoned if growth is a goal that is to be met.
Unnecessary friction is a major contributor to these abandonment levels. As highlighted by Encompass’ research, 93% of corporate treasurers have been asked by a bank for the same information multiple times, and 56% have had to deal with requests for the same details on several occasions. It can come as no surprise, then, that 73% say they are dissatisfied with their bank’s KYC process.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWe know that KYC is complex, and the most pressing challenge lies in balancing potential risk with the need to operate at speed and scale in order to grow. CDI is a game-changer in this regard, requiring no compromise as it drastically simplifies KYC processes and the task of building the all-important real-time KYC profile, which, until now, has been performed manually, resulting in a difficult, disparate and time-consuming endeavour.
Just what is CDI? Put simply, it is a holistic risk view of a customer that combines authoritative public data with private information to provide a complete picture for KYC purposes and more. Through these profiles, banks gain access to a unified source of truth and comprehensive visibility into potential risk.
Done manually, not only is this complicated and lengthy, but it is expensive. The inefficiency at play also means that many businesses have had to wait up to 120 days for access to accounts and services, which in itself represents a key driver behind the application abandonment rates of today. With 86% of treasurers revealing their business had lost revenue because of the process, potential missed costs total up to a staggering $3.3trn.
CDI, on the other hand, is at the heart of a robust and frictionless process, which allows banks to not only operate effectively but do so in a way that prioritises customer satisfaction. By concentrating on delivering the kind of service expected, and building loyalty among their customer base, institutions can vastly reduce abandonment rates and, ultimately, supercharge business revenue and growth.
Solving the outreach challenge to leverage data as an asset
As compliance requirements have grown, relationship managers are increasingly burdening their clients with requests to provide missing data or documents. This unnecessary outreach is expensive, severely impacts productivity and creates a poor customer experience. Ultimately, this will affect a bank’s ability to grow their client base and maximise its value.
With CDI, banks can craft truly client-centric experiences, leveraging advanced technology to obtain as much information on an entity as possible from trusted sources from the public domain. When supplemented with only the necessary client-submitted data, a comprehensive KYC profile is generated. This greatly reduces unnecessary friction and improves the experience for all parties.
Managing the risk and regulatory landscape
With a constantly moving regulatory landscape to contend with, keeping up with obligations and navigating complex corporate hierarchies is another area where banks can face challenges – and where CDI can streamline activities in a way that allows institutions to scale their client base safely.
Providing a holistic view of corporate entities, CDI makes the identification of ultimate beneficial owners – and understanding of potential risk – easier. This streamlining of UBO verification, enabled by the sourcing and normalising of KYC data, provides KYC teams with the ability to demonstrate rigorous and standardised compliance. Further to this, because CDI leverages global public data, it enables a consistent approach no matter the jurisdiction, specific regulatory requirements, or risk appetite of an institution.
CDI – the ‘when, not if’ solution
With CDI, banks can deliver the seamless digital journeys corporate customers not only expect but actively seek out. By streamlining KYC onboarding and maintenance, banks can accept more customers as well as improve loyalty and value. It is estimated that the benefits of CDI technology could reduce abandoned applications by up to 40%, making it clear why forward-thinking banks must leverage CDI to channel revenue opportunities and significantly boost trajectories – both now and in the future.
CDI holds the potential to unlock growth like never before, acting as a catalyst for meaningful transformation and setting standards for years to come. It is by embracing this innovative method that institutions will set themselves up to take advantage of a multitude of benefits – from improvements in efficiency and customer satisfaction through to the impact on the bottom line – and be at the forefront of leading an era of truly customer-centric banking.
Alex Ford is President, North America, Encompass Corporation
