The Role of Automated KYC in Enhancing Financial Inclusion

Know Your Customer (KYC) processes have long been an essential component of the onboarding process in the financial world. However, the financial industry is now contemplating the shift towards automated KYC processes. In a recent discussion highlighted in Fintech Global News, industry experts delved into the potential of automated KYC to foster financial inclusion.

Lleida.net European Chief Operations Officer, Patricia Fernandez-Trapiella, Bureau van Dijk Director of GRC Solutions, Ted Datta, and Santander’s Former Head of Due Diligence, Sanchit Langar, engaged in a thought-provoking conversation on this subject.

As the concept of perpetual KYC gains momentum, the question arises: can automated KYC surpass manual KYC in its ability to promote financial inclusion?

Ted Datta posed a critical question, stating, «The whole idea is why? What are the incentives to do this? If you think about KYC data on companies, why do companies file at Companies House in the UK? Well, to get a bank loan and so they have a presence. There is a whole cycle of inclusivity. You need, in any system, to work there needs to be an incentive for all participants, it needs incentives for people to register their data or fill it in accurately at the point of creation, it needs incentives for market participants.»

Datta emphasized that the existence of automated KYC on a broader scale is integral to its success.

With the increasing complexity of fraud and financial crime, KYC processes must evolve to become more detailed. This naturally raises the question of whether more extensive automation in KYC is the way forward.

As financial institutions grapple with the demands of regulatory compliance and the fight against financial crimes, the role of automated KYC in streamlining these processes becomes increasingly evident.

The discussion around automated KYC processes and their potential to enhance financial inclusion is a topic of utmost importance in today’s financial landscape. As KYC procedures continue to evolve and adapt to the changing dynamics of the industry, the adoption of automated KYC may hold the key to a more inclusive and secure financial ecosystem.