Five manual KYB processes that shouldn’t exist in 2024

In an age of automation Know Your Businesses (KYB) processes have been left behind.‍

These processes are crucial in assessing the risk and authenticity of business clients yet they have seen no meaningful innovation in decades - reflected by long onboarding question sets, spreadsheets and email based customer correspondence. Unfortunately these resource intensive manual processes have become commonplace in the vast majority of companies. 

It’s worth noting that these approaches have become so ingrained in organisations that a degree of complacency and a culture of “that’s the way it’s always been done” has creeped in. This lack of awareness was highlighted when we asked 200 c-suite members from UK payment companies about desired KYB innovations and 70% were existing functionality in the Copilot, by Detected platform.

There are plenty of risks associated with an over reliance on manual processes including natural human error, a lack of scalability and increased operational costs. However, the main concern is speed. Not being able to onboard customers fast enough not only delays time to revenue but also is a poor first experience for the customer.

So what can be done?

It goes without saying that reducing the number of manual tasks is key. A good start is identifying the most time consuming tasks and finding a more efficient and automated solution. Even better is integrating a sophisticated KYB provider, such as Copilot, by Detected. 

Continue reading to learn more about the risks of manual processes, 5 tasks that should be eliminated and more about how Copilot can reinvent your KYB processes by providing fast, safe and compliant business onboarding.

The risks of manual processes:

Human Error:

Manual data entry and processing are prone to errors, such as typos or incorrect data interpretation. These mistakes can lead to inaccurate records, misclassification of risk levels, and potentially costly errors in compliance reporting. In contrast, automated systems are designed to consistently handle data accurately, reducing the risk of such errors.

Inefficiency and Delays:

Manual processes generally require more time to complete compared to automated ones. This inefficiency can lead to slower response times, longer customer onboarding, and delays in identifying and reacting to compliance issues. Automation helps streamline operations, allowing for real-time data processing and quicker decision-making.

Lack of Scalability:

As a business grows, manual processes can become a bottleneck. They often don't scale well with the increase in volume, leading to backlogs and increased workload on staff. Automated solutions, however, can handle an increase in volume much more efficiently, facilitating easier scaling of operations without a proportional increase in errors or delays.

Increased Operational Costs:

Relying on manual processes often requires more staff to manage and execute tasks, which can significantly increase labour costs. Automation reduces the need for manual labour for repetitive tasks, thereby potentially reducing operational costs.

Compliance and Security Risks:

Manual processes can make it difficult to maintain a consistent and secure compliance posture. They might lack the robust tracking, logging, and control mechanisms that automated systems can provide. This can lead to non-compliance with regulatory requirements, potential security breaches, and inability to provide audit trails in case of legal scrutiny.

Automating tasks not only addresses these risks but also enhances the overall effectiveness and reliability of business operations.

5 manual processes that shouldn’t exist:

Data Collection and Entry:

Manual Task: Collecting business registration details, addresses, and director information from various sources, and then manually entering them into a system.

Automated Solution: Implement automated tools that pull data directly from trusted and official databases like corporate registries or credit bureaus. This can reduce errors and increase efficiency.

Identity Verification of Key Individuals:

Manual Task: Manually checking the identities of key business stakeholders, which involves verifying identity documents and cross-referencing information.

Automated Solution: Use of digital identity verification services that can authenticate IDs from various countries in real time, using document scanning and facial recognition technology.

Sanctions and Watchlist Screening:

Manual Task: Searching names and entities against multiple sanction lists, watchlists, and politically exposed persons (PEP) lists to ensure no associations with unlawful activities.

Automated Solution: Integration of automated screening software that continuously updates and checks against global and regional sanctions lists and can flag any matches for further review.

Risk Assessment and Scoring:

Manual Task: Evaluating data to assess the level of risk associated with a business, which can be subjective and inconsistent.

Automated Solution: Implementing algorithms that can systematically analyse risk factors based on predefined criteria and generate a risk score, ensuring consistency and objectivity in risk evaluation.

Ongoing Monitoring and Updates:

Manual Task: Periodically reviewing and updating business information to catch any relevant changes that might affect their risk profile or compliance status.

Automated Solution: Using software that can monitor changes in company status, directorships, and beneficial ownership in real-time, sending alerts when significant changes are detected.

Onboard. Verify. Protect.

‍Removing manual processes is a starting point but integrating a sophisticated platform will provide more scalability and security. Copilot, by Detected, approaches the whole Know Your Business (KYB) process with three simple steps:

Onboard - Accelerate the onboarding process for all your customers; while also acquiring essential information about them including company credential, registry documents and financial data. During the onboarding flow you can also verify directors and key individuals using the ID Verification module.

Verify - Using AI, automate the approval of the low-risk customers while also capturing additional data to verify and validate where compliance needs are more complex.

Protect - The ongoing monitoring, protection and alerts when the status of a customer changes is as important as the initial onboarding. Ongoing monitoring ensures safety throughout the customer’s association with your company.