Know Your Customer (KYC) regulations add identity checks to banks’ customer onboarding processes. The KYC process is not fully automated, so it adds to bank employees’ casework, making it one more thing to manage. This article explains the basic process model and highlights key benefits of using Signavio Workflow to manage a KYC process.

Know Your Customer process model

A Know Your Customer process consists of a number of customer identity checks that precede a decision to approve a new customer and start the onboarding process.

Simplified Know Your Customer process model

This example uses a manual approval, with a ‘Verify request’ user task that requires a manual Approve or Reject decision. In practice, a KYC process includes more checks.

  1. Validate name & address – check customer identity.
  2. Validate name for Interpol & PEP – check the name against lists of known people.
  3. Calculate the customer’s risk of being involved in illegal activity.

These checks add user tasks to the start of the process, before the approval decision.

Know Your Customer checks model

In practice, you would automate some or all of these checks, changing user tasks to script tasks. The exclusive gateway then changes from a manual decision to an automatic decision. You could also add a manual ‘Review customer’ task in case the automatic check was not conclusive.

Automated Know Your Customer checks model

This version of the process model makes one more addition: the ‘Notify rejection’ task adds the rejection notification pattern to the model. An automatic notification informs the would-be customer without any delay.

Finally, as explained in Building custom activity types using sub-processes, you can extract the Know Your Customer checks into a sub-process to delegate the process model ownership to the fraud department.

Know Your Customer sub-process model

From a process modelling perspective, this remains a simple example. The benefit of using Signavio Workflow comes not from understanding a complex process, but from executing it.

Benefits of KYC workflow execution

Performing this kind of business process manually tends to lead to inconsistent execution, task handover delays and poor visibility of work in progress. Executing a KYC process using Signavio Workflow delivers several benefits.

  1. Signavio Workflow’s cases view makes work in progress visible, so management updates don’t interrupt work.
  2. Signavio Workflow automatically records and stores the results of process execution, making process execution verifiable.
  3. KYC checks are less likely to be skipped during customer onboarding, improving process quality.
  4. Each case continues automatically after KYC checks are not complete, avoiding delays in handovers between departments, and reducing onboarding time.
  5. The process model is flexible, so you can update it as KYC requirements change.

These benefits represent improvements in the quality of the process result, which are extremely valuable. As with other banking processes, it is essential to perform KYC checks efficiently and correctly.

Whatever business you’re in, try Signavio Workflow for your own customer onboarding process. To get started, sign up for a free trial.

Published on: October 6th 2016 - Last modified: April 3rd, 2018