5 areas of manual review which shouldn’t exist in 2023

Aug 15, 2023
Jan 20, 2024
min read
Ben Ainslie

Across various business departments automation is a pivotal approach for streamlining and enhancing processes. For instance, consider a marketing team who schedules all their social media posts at once, enabling them to focus on new strategies, analysing the success of current campaigns and nurturing leads. Similarly, HR teams use self-service portals to reduce their administrative load while also providing their employees with control over their personal information.

However, automation doesn’t seem to always find its way to compliance teams. This is especially prevalent in B2B situations where due diligence requirements are extensive, constantly changing and yet ill-defined; leading teams to perceive that automation is incompatible due to the multifaceted demands. As a result, the highly analytical mindset of compliance teams often gets reduced to completing repetitive, simple and dull tasks.

This influences the efficiency of the compliance reviews. This article will highlight five common manual tasks that compliance teams have to complete and explain the key limitations and risks associated with not automating them. Initially there are some general themes concerning the problems with manual reviews that need to be addressed.

The problem with manual review

The obvious problem with manual review is the sheer time investment it takes and the substantial costs incurred. Entire teams can be reduced to completing a series of resource-intensive review tasks. This presents a two-fold challenge: as the company grows the onboarding requirements will mature alongside it and there will be a surge in the number of onboarding clients. This results in more manual checks being performed which requires scaling the resources available to complete them. It’s a never ending cycle of hiring more people to match the growing compliance demand.

As alluded to before, this situation devalues the individuals who are having to complete these manual checks and generates a shared frustration within the team. We’ve all encountered the frustration of dull tasks punctuating our day, but imagine this being a daily continuous cycle.

Not only is this demoralising, but the link between repetitive tasks and performance has been well researched. The verdict is clear: mundane tasks decrease performance, particularly when transitioning from a simple task to one that requires a higher degree of cognitive function. The correlation between a fully manual review system and the diminished performance of a compliance team becomes clear.

Furthermore, it’s vital to clarify that merely ticking a box and conducting analysis is not the same thing. An onboarding client should not be approved because they have simply checked the requirements. Instead, a contextual evaluation needs to be conducted that draws in information from across the application and a considered decision needs to be made.

Underpinning all of these flaws is the most critical and concerning one. A manual review is inherently incomplete and unreliable. It is limited by the amount of time and the quality of the research conducted. It also lacks the proper systems to ensure that the information being found is authentic and relevant. Consequently, a manual compliance process can leave a company vulnerable to fraud cases and regulatory breaches while also damaging its bottom line.

So, what are five tedious steps that can be automated to reduce the manual effort required and, importantly, reduce risk:

1. Checking office locations

A common and important step in most compliance reviews is verifying the physical location of your customer. Online maps have already made this process easier by removing the need for physically checking the office location but they still require manual effort and external sources.

The process can be made much easier if the address is automatically captured and verified during the onboarding process and then presented for the compliance officer. The location can be confirmed removing the need for manual investigation. This removes the risk that the wrong address has been used which can often happen when manually having to search for the address.

2. Searching for directors and owners

Obtaining a list of directors and owners is another time consuming process. When this information isn’t obtained from the customer then scouring their website and LinkedIn profiles to identify these individuals is required.

The risks are plenty: an individual may not have LinkedIn, how can you check past directors and what if an enterprise client has thousands of employees. Automation improves this process by capturing the information directly. A company representative is much better placed to provide this information which can then be cross checked against director lists generated from data sources, removing manual input.

Gathering this information is just the first step. Names have to then be screened for adverse media, PEPs and Sanctions which is another manually intensive exercise which will be covered next.

3. Adverse media via search engine

This is one of the most concerning manual tasks that compliance analysts have to complete. If a compliance team does not have access to an adverse media supplier, they may find themselves resorting to search engines, laboriously entering names of companies or individuals alongside carefully chosen trigger words. 

The pitfalls of this approach are clear: how do you determine how many trigger words to search, how many pages of results do you look through and how can you validate the relevance of the article especially if dealing with a common name.

Access to an adverse media provider will streamline this, but still leaves room for further automation. The pinnacle is an integration between your onboarding flow and an adverse media supplier so that checks are executed automatically and only relevant articles are highlighted for evaluation.

4. Cross check with Sanctions lists

The same can be said for Sanction lists. A similar process takes place with the same drawbacks. A fully built integration would flag any company or individuals without any input from the compliance officer.

5. Monitoring changes in ownership

Compliance is an ongoing process through a client’s relationship with your company. Once the essential information to review a customer has been collected, it then has to be securely stored and available for ongoing checks.

The manual workload required to replicate all the checks, searches and verifications, again, can lead to frustration. It can also take a toll on revenue streams by syphoning away valuable time that could be used for reviewing new clients instead.

However, if a substantial portion of the review process is already automated, performing searches and reviewing any results can be much quicker. Even better, is an alert system, calibrated with your preferred refresh rates. These alerts can monitor any changes and can be used to form the basis of an audit log. As a result, the compliance analyst’s involvement is limited to the event of an adverse discovery.

How can these manual processes be eliminated:

A sophisticated KYB provider can remove all of those manual processes and allow compliance teams to perform highly analytical risk reviews. Integrations to data sources, domain checkers and ID providers reduce the number of services that a compliance team has to use and eliminates unnecessary manual steps.

Additionally the toolset included with a KYB provider should feature user management, ongoing monitoring capabilities and the ability to assign risk categories. On the front-end, a white-labelled, configurable onboarding flow can seamlessly collect information to create a single source of truth for that business.

Final Thought

Compliance teams will always require some level of manual decision making. A fully automated process which displays a score or percentage can be just as misleading which again highlights that the analytical input of the compliance officer is the most important element. Their time should not be spent gathering information in a completely manual and wasteful manner. The team should be empowered by having automation throughout their review process so that information is presented in a concise and effective format.

Detected offers a true end-to-end KYB solution. A comprehensive KYB dashboard becomes the single solution for a compliance officer as it presents all the information collected from the onboarding flow in one single profile.

By combining user-entered data, utilising the business owner as a data source, and a range of global data providers the company profile generated removes the tedious manual tasks for a compliance team and allows them to focus on their review.

With Detected, once a customer has completed the flow a compliance officer will see the profile in the dashboard immediately. Already PEPs, Sanctions, adverse media screenings will have been completed and data including company credentials, financials and directors will all be displayed. The profile can be assigned and categorised by risk with notes and documents uploaded to the profile as it moves through the review process. At any point the compliance officer can request more information from the user by clicking one button.

Keep up to date with Detected and the developments in the KYB space or book a demo today to understand how Detected can bring value to your company.

Article by
Ben Ainslie

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