I spent an amazing week in London, where I spent most of the time discussing the challenges related to Know Your Customer (KYC) outreach for funds and financial institutions.

Here are the top three challenges and top three recommendations.

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In theory, reaching out to a counterparty and asking for data and documents should be a fairly basic task. However, this is far from the case - so what is the problem?

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1️⃣ Most banks do not use a bespoke outreach tool.

This implies that they email the customer, specifying the document requirements and enclosing a PDF questionnaire for the customer to fill out. This creates multiple problems, from customers being frustrated with an antiquated process to internal problems with keeping track of the outreach process across multiple KYC analysts.

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2️⃣ The customer never replies. Or at least it takes them a very long time.

The average number of days from first outreach to case closed for corporate KYC outreach in the Nordics is more than 160 days. This is mainly due to unresponsiveness on the customer side. Why? First of all, the vast majority of customers really hate KYC. They do. So you have to make it easy for them.

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3️⃣ Once the bank gets the data back, the real work starts.

Often, this entails copy-pasting data from the email or questionnaires into their tech stack to initiate risk scoring and screening. Due to customer frustration, the quality of data and documents is usually quite low, implying more work and outreach.

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The above leads to a wonderful combination of low customer satisfaction, high operational costs and low compliance, as most regulators don't understand why it would take a corporate client anywhere between 3 and 12 months to undergo Due Diligence (DD).

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So how can you improve this?

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✅ Don't use email and PDF questionnaires. Use a tool that the customer can easily access and provide the data.

To make it easier, prefill the data you already have. Multiple persons at the customer should be able to work on the case simultaneously.

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✅ Ensure that your questionnaire engine offers maximum flexibility.

You need to tailor your outreach to multiple use cases across jurisdiction, industry and risk category. This also enables you to collect data about KYC, tax, ESG and more in one outreach process. Your customers will love this.

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✅ Make sure your tool is the right one with all the features you need - and don't yet know you need!

It should at the very least have automated reminders and a clear case overview so the KYC team can collaborate across multiple customers and requests. Ensure that the API infrastructure is mature so you can inject data into your tech stack seamlessly. Finally, if you choose a tool where the customer can also sign up and reuse the data for other banks or funds requesting KYC from them, then you will be a superstar.

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