Marc Murphy, CEO
Over the years the banking environment has become a battle of wits: the criminals try to find the loopholes and the financial institutions strive to close them. Banks and financial institutions are the major targets for fraudsters and cybercriminals today. According to the recent Identity Fraud reports nearly 16.7 million customers became the victims of identity fraud. As the number of financial crimes and frauds increase, know your customer (KYC) practices to assess and monitor customer risk proves to be indispensable for financial institutions. Especially with the emergence of new regulations, keeping customer’s identity and their data secure is a great challenge for financial institutions and banks. Against this backdrop, organizations confront the challenge of preventing identity thefts while meeting regulatory compliance.
"Leveraging our platform, banks can enhance the end-customer experience whilst fast-tracking opportunities for revenue"
One company making giant strides in helping financial institutions manage and protect customer’s identity and data from fraudsters is Fenergo. A compliance and regulatory risk management solution provider, Fenergo is committed to helping financial institutions with end-to-end customer lifecycle management processes that include addressing regulatory and entity data, and onboarding challenges.
Fenergo’s Know Your Customer (KYC) platform, a single, integrated technology meets the customer policy requirements and supports regulatory needs across multiple jurisdictions and business lines. The platform efficiently manages all KYC policies and regulatory compliance requirements right through the entire customer lifecycle, including regular, ad-hoc and event-triggered reviews, as well as data and documentation refreshes.
Powered by a sophisticated regulatory rules engine, Fenergo provides an out-of-the-box repository of rules, which can be easily configured by financial institutions to future-proof against evolving regulatory and operational requirements. “With increasing regulatory change and the expectation to deliver an optimum customer experience we are seeing accelerated demand for customer lifecycle management amongst financial institutions. Leveraging our platform, banks can enhance the end-customer experience whilst fast-tracking opportunities for revenue,” says Marc Murphy, CEO, Fenergo.
The Fenergo solution leverages dynamic decision tree intelligence to determine the regulatory journey of the customer including all the regulations, KYC questionnaires, classifications and risk assessments that need to be adhered to and performed. Fenergo’s platform is specifically designed to accurately measure and monitor the risk exposure presented by customers, and minimize the risk by ensuring continued compliance throughout their lifecycle.
Fenergo’s KYC platform is integrated with an advanced capacity management module that provides the ability to meet the demand for reviews based on client risk ratings and the availability of compliance review resources
Furthermore, it also identifies all the customer and counterparty data, and documentation that are required to support the KYC and regulatory compliance obligations. From the moment a customer of the bank is ready to be onboarded, the solution examines all relevant data to calculate an appropriate risk-rating for the client. The platform’s ability to create a single client view of all individuals, entities, and ultimate beneficial owners enables institutions to conduct accurate KYC and AML risk assessments. The Fenergo KYC solution collects data, documents and compliance requirements from various sources across the bank through its optimized workflow automation to deliver an institution-wide, single client view. “As a firm dedicated to providing the financial industry with client onboarding and regulatory compliance solutions, Fenergo continuously captures and maintains this data as part of our day-to-day business. It is our experience and deep understanding of global financial regulations that permits us to extrapolate global trends, allowing us to offer this additional insight to our clients,” elucidates Murphy.
A Risk-Based Approach to Lifecycle Compliance
Fenergo’s KYC solution adopts a risk-based approach that is aimed at minimizing compliance risks. It allows financial institutions to efficiently manage regulatory onboarding and customer lifecycle management by assigning a risk-rating based on the data provided. This risk score signifies the level of due diligence the customer will have to undergo–either a standard level of due diligence or an enhanced level of due diligence for a higher-risk entity. The rules-driven risk-scoring capabilities of Fenergo KYC enable financial institutions to focus on reviewing higher-risk profiles of clients. Apart from this, each client will also undergo ongoing due diligence as their risk status changes over time and the system facilitates event-triggered reviews based on significant changes in data, enabling the institution to identify and prevent evolving threats.
Fenergo’s KYC platform is also integrated with an advanced capacity management module that provides the ability to meet the demand for reviews based on client risk ratings and the availability of compliance review resources. It enables compliance managers to re-allocate higher risk clients and match reviews to available resources to ensure continued compliance. Furthermore, this tool also enables compliance teams to group related entities or associations together to ensure a review is done in tandem for a related set of businesses under a parent group.
Along with compliance documentation, Fenergo’s KYC platform automatically generates file regulatory reports that enable financial institutions to save valuable time and effort in maintaining a high level of compliance. In addition, the solution provides holistic support by addressing queries and complaints, data change requests, case management and correspondent tracking.
By deploying Fenergo KYC, banks and financial institutions can achieve compliance with evolving AML/CTF legislation and ensure a timely and efficient onboarding of clients. Users can also automate risk-scoring processes throughout the lifetime of the client, minimizing overall risk to the institution. The platform also allows banks to understand the true nature and purpose of the account being set up and investigate sources of wealth and define the ultimate beneficial ownership. Users also gain a clear view of the size of risk presented to their institution from a financial, regulatory, and reputational perspective. And finally, Fenergo’s flexible solution lowers the cost of ownership and can be adapted to respond to a changing regulatory environment.
Tackling Regulatory Challenges
Fenergo has proved its mettle working with several financial institutions of all sizes, spanning investment, corporate, commercial and private banks, to solve regulatory compliance, data, and lifecycle management challenges.
One of their clients, a large financial institution headquartered in North America, in a recent regulatory order was told to revamp their compliance programs after deficiencies were found in relation to internal controls, customer due diligence, and transaction monitoring. Upon reviewing its compliance operations, the bank concluded that current approaches to managing KYC compliance have many loopholes. The bank operated with a traditional KYC structure in place with each business unit and jurisdiction having its own onboarding teams, KYC and compliance teams, and data teams. In a structure like this, not only is the work duplicated but very often, each business unit will have its own silos of client data and documentation that doesn’t contribute to a single view of the client to expedite future compliance/onboarding processes.
In an effort to find a better way to manage compliance for the Group, the large financial institution undertook a transformational project to radically restructure its compliance program and ensure the highest level of control over its KYC compliance processes. This restructuring effort was underpinned by Fenergo’s KYC compliance solution. By centralizing KYC compliance, the central team became responsible for collecting, storing and re-using all of the regulatory customer and counterparty data and documentation required to support KYC compliance. With a single view of customer data, documentation and compliance outcomes, the banking group was in a better position to be able to re-use and leverage client data and documentation across other regulatory frameworks. The Fenergo’s KYC platform also facilitated the handover of client requests for KYC compliance approval to the central compliance team, which enabled onboarding teams to focus purely on the onboarding process. This not only expedited overall onboarding times but also enabled the client to achieve faster time to revenue and created additional focus around upselling and cross-selling activities.
For the road ahead, Fenergo intends to continue to invest in their core CLM platform and will enhance its capabilities to better serve customers. Mirroring Fenergo’s recently announced activity in the asset management space their aim is to engage with market practitioners through the Fenergo Global Regulatory Forum. The forum will allow the Fenergo team to better understand their needs, and extend world-class services based on their preferences and drive mutually beneficial growth for all parties.