BANDAR SUNWAY – As much as we wish, implementing an e-KYC system is not as simple as purchasing plug-and-play solutions off the shelves. Many organisations need to review their internal processes and make significant changes in their operational workflow for e-KYC systems to work effectively.
Fortunately, we can break this transition into three critical aspects via the PPT framework — People, Process and Technology. In light of the stringent requirements set out by Bank Negara Malaysia (BNM), a fourth aspect — Regulatory, is added into the mix.
“People” refers to the human resources available at the company’s disposal. Although e-KYC solutions are powered by artificial intelligence, human intervention is undoubtedly needed to fill in the gaps left uncovered.
A company’s internal compliance team might be used to operating under legacy conditions, verifying consumer identities by going through the standard operating procedures (SOPs). However, technology can help them relinquish low-value and repetitive tasks, which allows them to focus on their core processes, which may require changes in their job descriptions.
Mid-management personnel that is well versed in e-KYC technology is also valuable to any organisation looking to implement such technologies. Companies may need to consider upskilling their existing employees by opting for e-KYC workshops or online courses.
Companies may also need to consider hiring IT personnel to oversee the company’s technical aspects of implementing e-KYC solutions.
“Process” refers to the SOPs as mentioned above needed to run business operations.
It is imperative that all staff members understand how they fit into newly-introduced SOPs and have a clear understanding of their roles and desired outcome. This means communicating the proper instructions via the correct channels and training critical stakeholders during the design and review stage.
It is also essential to set up an accountability chart to identify bottlenecks within the new processes quickly. With greater visibility, management can quickly rectify any process issues and ease employees into a new workflow — replacing old habits and methods.
SOP changes may also affect stakeholders beyond the reach of the company. Most e-KYC solution adopters, such as telecommunication providers and banking institutions, regularly outsource their business operations to third parties for both back-end and front-end processes. These third-party entities also need to be briefed on the newly established SOP changes as well.
Technology refers to the tools that companies use to implement the processes. While e-KYC solutions sound simple on paper, there are many aspects to consider when setting up the necessary back-end infrastructure required to run these operations.
Several questions the board of management can ask themselves include:
According to policy documents provided by BNM, a financial institution needs to fulfil three basic requirements for customer authentication:
Based on our observations, the policy requirements for e-KYC solutions are made intentionally broad and vague to not stifle innovation within the industry whilst still keeping consumer interests at heart.
However, it is still vital for companies to strictly adhere to the policy requirements because the e-KYC industry is built on top of the pillars of trust and reliability.
Companies looking to implement e-KYC solutions should not view the points above in isolation but as a collective because they are intrinsically interlinked. Once the above issues are addressed, it will give companies the necessary insights and confidence to implement e-KYC solutions to bring value to these companies.