How banks can finally reduce their Karbon footprint

Imagine this, you are a COO of a major bank managing hundreds, sometimes thousands of people globally on Know Your Customer (KYC) and Anti-Money laundering (AML) tasks. Time that could otherwise be s


Gary has 25 years of industry experience across several financial institutions, providing expertise in Client Lifecycle Management (CLM) and the development of KYC, CDD and AML managed services.

Gary McClure
Head of CLM Managed Services and Technology

Imagine this, you are a COO of a major bank managing hundreds, sometimes thousands of people globally on Know Your Customer (KYC) and Anti-Money laundering (AML) tasks. Time that could otherwise be spent focusing on the better risk decisions is instead used to run an army of people gathering information on clients, all before inputting the information (often incorrectly) into multiple systems.

For those that work on this daily, it will no doubt sound familiar, but when one actually steps backs and looks at the bigger picture, all KYC is really about is harvesting and inputting data into a system before then deciding on whether or not to on-board or retain a customer. Sounds simple when put in these terms, so why do so many banks still have KYC processes in place that are costing millions in additional tech and operational expenditure per year?

Well, it could well be down to the fact that, for a while now, doing the more mundane tasks has not been core to the business. According to a recent McKinsey Banking study, after consecutive years of cost cutting pressures finally taking toll, the industry is beginning to take a closer look at these non-differentiated tasks in a desperate drive to seek out efficiency savings.

The trouble is that while KYC activity falls into the nondifferentiated tasks, nobody has found a way to run these tasks more efficiently. Take an analyst working for a bank as a case in point. Typically, they would take significant time just to research and gather the required insight into the suitability of a potential client, combined with the time to research the client and related parties across the media and sanctions lists.

However, what if a COO could find a way to get this capacity back while cutting their operational and technology costs by up to 40 per cent? Today, we have launched a ground-breaking technology that uses AI and NLP technology to work through and more effectively gather all the required KYC information in one place. The solution, called Karbon, gets hold of and analyses data before applying it to KYC criteria automatically reducing the need of human intervention. Essentially what the platform does is remove all the manual tasks that banks typically have to deal with through the KYC on-boarding and ongoing monitoring processes. It structures the data in a way that means analysts are no longer spending their time cutting and pasting data, they are instead carrying out due diligence on the company structure and analysing the information.

Throughout my 25-years plus of doing KYC, including nine years at HSBC, Karbon is unquestionably the best technology platform I have come across. It is two years ahead of where the competition is currently in terms of how it approaches KYC and how it uses data to solve problems that have, frankly, been a heavy burden on the industry for far too long. Crucially, Karbon is going to underpin our existing managed services and remediation business lines. This means in addition to the technology, banks can have all their KYC operations carried out for them by highly experienced and proven practitioners either remotely, or on-site. With everything else going on in the wider world right now, banks have enough to think about from a cost perspective. If a major firm can overcome this longstanding KYC headache with a full customer lifecycle management (CLM) solution encompassing the best technology, practitioners and service, then surely KYC operations can be one area of cost that can be saved.