KYC - As easy as ABC Blog

KYC – As Easy As ABC

A number 3 as usual, sir? Your usual table Mrs Jones? Whether its a quick trip to the barber or a regular visit to the local Indian restaurant, we appreciate it when people who are providing us with a service know us and what we like. We feel we are in the hands of professionals and that they care.

Knowing your customer is fundamental to pretty much every business. The provider of a product or service needs to know what their customer likes and what they can afford. If you’re in the cafe trade you need to know whether your customers want a take-away latte with a caramel shot, a mug of builder’s tea or a pot of Earl Grey with matching tea cups. And you know what they can afford.

A Business Phenomenon

Whilst all this might seem the epitome of common sense, it is in fact so important that, according to job seekers website jobhero.com, companies are now recruiting KYC (Know Your Customer) Analysts, with some in the States earning over $100,000 per annum. They also report that the Bureau of Labor Statistics is projecting job growth in this sector to rise by 19% between now and 2024, as companies increasingly depend on the analysis of customer behaviour for growth.

And this is not just an American phenomenon – there are currently 173 London-based KYC jobs being advertised on recruitment company Reed’s website.

Many and perhaps the majority of these KYC professionals are working for banks and lending institutions and have expertise in reviewing documentation for new customer accounts, studying market trends and observing customer behaviour patterns. They also analyse risk and compliance issues and are knowledgeable about anti-money laundering (AML) processes.

This is all good news because the more the banks know customers, the more they will be able to support them and ensure they only take on the level of debt which they can afford. And that means they keep their customers safe.

But we have even better news and some of the UK’s forward-looking banks are in on this with us.

The KYC Analyst’s Best Friend

We have our Affordability Passport technology, where all this KYC work can be done for every single customer of a bank, within minutes. Using an innovative open API, the Affordability Passport takes customers’ transactional data and categorises it into 155 categories of discretionary and non-discretionary income and spending. For example, the Affordability Passport software can instantly identify and categorise salary, benefit payments, rental repayments, child care costs, the weekly grocery shop or how much is spent traveling to work.

The Affordability Passport tool gives lenders an unprecedented understanding of their customers’ spending habits in the click of a mouse. Its incisive categorising will allow a bank to spot tell tale signs that a customer is heading for trouble – such as a missed payment, a missed salary cheque or even a switch in the weekly shop from Waitress to Lidl. And the powerful analysis software will also flag up anomalies in an account, providing a cue for the lender to investigate further. All this transactional data is then merged with the customer’s credit report to give a lender a high definition picture of its customer. The Affordability Passport reporting also facilitates compliance with all the industry regulation such as AML, IFRS9, the updated data protection GDPR and KYC guidelines.

In short therefore, all KYC guidelines are checked off by a customer processing an Affordability Passport:

Affordability of a loan for a customer is assessed through the
Break down of transactional data by FCA categories and a range of checks that the customer is
Compliance compatible

And yes, that means that KYC with an Affordability Passport is as easy as ABC.