Key KYC Trends for 2024
In the first month of 2024, we asked some members of the Avallone team about the key KYC focus areas that they can see trending this year.
FRACTIONAL CHIEF COMPLIANCE OFFICERS (CCO)
This year, it’s going to be more and more common to see companies working with “Fractional Leaders” - where a company will benefit from the leadership, knowledge and experience of a C-Level executive - but at a fraction of the cost. This will be particularly successful within the KYC / Compliance space - as it is often difficult to find a suitable business case to hire someone full time at that level - when very often, this expertise is needed in key areas at certain periods or use cases. With a Fractional CCO or similar executive level compliance officer, companies will be able to navigate the increasingly complex regulatory landscape for AML and KYC and scale their KYC programs and teams incrementally.
Anders Meinert Jørgensen | CEO and Co-Founder, Avallone
OUTSOURCED KYC ASSISTANCE AND ADVICE
With the growing workload needed to perform KYC, I see that there will be more businesses choosing to strike a better balance with their costs and in-house expertise - by leveraging the manpower of external consultants and partners. KYC is a risk that many organizations cannot overlook, and now that there is a greater variety of options available with outsourced help - from large consultancy firms to smaller boutique firms to managed service teams within software providers, I think it will be quite common to delegate not only the first line, manual portions of the compliance work but also some of the more tricky areas that need specialized KYC knowledge - which also has the benefit of cost and time efficiencies.
Sune Warberg Clausen | VP Financial Crime Prevention and Customer Success, Avallone
PROACTIVE, OPEN KYC
Traditionally, KYC has been more of a reactive task - where one party will only provide information when asked by another party. But in today’s fast moving socio-political and economic environment, many more companies will opt to have their KYC information prepared and readily available for any one they might be working with - in a proactive, open manner. This not only demonstrates a company’s commitment to KYC / AML, it will undoubtedly make it faster to finalize any business relationships - as it circumvents the wait time and back and forth that you get when working on KYC in the usual, reactive manner.
Eglė Markelionytė | Financial Crime Prevention Services +Support Lead, Avallone
KYC IN NON-REGULATED INDUSTRIES
I see a trend this year with increasing KYC being requested by companies in non-regulated industries or regions - meaning that everyone is doing KYC on each other - even without any regulatory needs in a preventative manner. This is happening with companies and KYC teams being anticipatory and prepared, so should there be anything unexpected or sudden - be it new expectations from financial institutions or evolving international sanctions - the organization is ready. I hear from customers every week who are not required by law to do KYC but want to actively engage in “knowing their counterparties and customers”.
Lars Mørch | CRO, Avallone
KYC KNOWLEDGE EXCHANGE AND COMMUNITY
While KYC is far from being standardized, those who work with it all have similar experiences - albeit unfortunately, usually painful, and I see more and more of the individuals who work with KYC, AML and other financial crime prevention and compliance teams want to share their expertise and knowledge with others to create more of a community / professional group. The great thing is that this drive comes from individuals from all sorts of industries - as well as from both the banking and the corporate world. We definitely are part of this trend at Avallone - as we want everyone - regardless of their KYC program and the tools they use - to be able to learn from and teach each other about the best practices and approaches to KYC.
Ada Chan | VP Strategy and Planning, Avallone
What are your predictions for KYC in 2024?
We'd love to hear what you think will be trending for KYC! Post your thoughts in the comments in our LinkedIn post.
