Navigating the complexities of Know Your Customer (KYC) processes is paramount for businesses operating within the rapidly evolving financial landscape. Statistics indicate a growing expenditure by Malaysian financial institutions on compliance measures. A report by PWC stated that KYC costs now constitute approximately for 3% of a bank’s total operational cost base, which makes it a significant cost. Furthermore, the rise of sophisticated fraud and money laundering techniques necessitates a more agile and efficient approach to KYC optimization as it severely impacts banking, FinTech, e-commerce and telecommunications sectors, all striving to balance security with a seamless user experience.
In 2024, Fenergo conducted a study of more than 450 C-level executives across corporate, institutional and commercial banks. The study revealed that 67% of them have lost clients due to slow and inefficient client onboarding and KYC, a sharp increase of 19% from the previous year. Singapore’s banking industry in particular is confronting an alarming rise in client exodus, with nearly 90% of financial institutions losing customers over the past year due to delays and inefficiencies in Know Your Customer (KYC) processes and client onboarding with potential losses being billions of dollars. In Malaysia, TNG eWallet became the FIRST eWallet in Malaysia to implement 100% eKYC verification. Not only does this provide an extra layer of security by reducing the risk of fraud and unauthorised access, but also expands user eligibility, unlocking access to additional features and products. Inadequate KYC verifications can also lead to Customer Due Diligence (CDD) failures. In July 2024, Bank Negara Malaysia (BNM) imposed RM1.66 million in penalties on four financial institutions for late, incomplete and inaccurate submissions of critical data in accordance to the FSA 2013 and Islamic FSA 2013.
A study conducted by Mckinsey shows that the enabling of eKYC can potentially drive cost reduction of 90% in customer onboarding. Additionally, the implementation of a digital identity would potentially allow for 1.7 billion of the unbanked population to gain access to financial services. The benefits of KYC optimization extend beyond mere compliance and risk mitigation; they tap into a fundamental driver: the desire for increased profitability and efficiency. Join us at the KYC Optimization conference by Trueventus and learn from the industry leaders about the strategies and technologies that will propel your organization towards streamlined operations and enhanced customer onboarding. Optimizing KYC isn’t just about adhering to regulations – it’s about smart business practice that fuels growth and maximizes returns in Malaysia’s dynamic economy.
