KYC is a key challenge for fintech companies: TDCX report

According to the Rethinking Fintech Customer Experiences report, almost one in two (49%) fintech companies cited KYC or Know Your Customer checks as their top priority. The report was released by TDCX (NYSE: TDCX), an award-winning provider of digital customer service (CX) solutions for technology and blue chip companies.

The challenge of KYC affects even the most established fintech companies: almost four out of 10 (37%) mature fintech companies share this opinion. This may be due to the lack of a single global KYC standard and increased financial crime compliance requirements under global sanctions.

For example, TDCX observed that the KYC process is hindered when documents such as ID cards are not shared in a consistent manner (photos vs. scanned, color or grayscale), resulting in two-way correspondence that sets a bad tone for building good customer relationships. . Similarly, underinvestment in technology continues to hamper new customer acquisition. Other key challenges for fintech leaders mentioned in the report were the need to maintain sufficient hours of operation, a worldwide customer base, and the availability of quality and responsive services.

Business-to-consumer fintechs have a harder time managing KYC (55%). This is consistent with the results of a separate survey.[1] that more consumers have abandoned financial services apps due to long forms and excessive requests for personal data. While collecting customer information is mandatory for fintech companies, complex registration processes can turn off potential customers.

Mr. Rikart Valkens, Director of Client Solutions, TDCX, said:, “KYC has become a key focus for fintech companies. Not only is KYC important for regulatory compliance, but it is also an inevitable part of the customer onboarding process that will either result in a seamless customer experience or greatly frustrate them.

“As the amount of information required for due diligence has grown exponentially over the past few years, fintech companies are looking for ways to balance the need to provide their customers with speed and convenience while remaining in compliance.”

Data Analytics – Area of ​​Opportunity

The report also showed that only 21% of fintech companies use data analytics to support their KYC processes, and 35% of them outsource their KYC processes. Fintech companies were most focused on using data analytics for personalized marketing (55%) and helping customers make financial decisions (40%).

Mr Valkens said: “While it is not surprising that fintechs are devoting more resources to revenue-generating activities, it would be beneficial in the long run to use data analytics to improve their KYC processes. We have also noticed that more customers are looking for ways to improve business performance with transformative CX solutions. To that end, we recently launched our digital CX Center of Excellence to provide greater support to our customers. One of our goals is to develop data science and analytics best practices to help businesses improve cost efficiency.”

One company that has used TDCX for their KYC needs is a global payment gateway provider. TDCX supports the company in hiring the right people with the right skills to conduct KYC checks and advanced customer reviews. With TDCX support, the company was able to complete KYC processes faster, resulting in a 20% increase in productivity.