AI, Automation And KYC: Enabling Improved Compliance And Customer Experience

In order to keep pace with the ever increasing customer base, financial institutions and banks across the globe are switching to faster Know Your Customer (KYC) processes. KYC not only provides in-depth information about your customer, but also protects your organization from defamation, legal issues relating to customer frauds and safeguards your business from insolvency.

Role of Artificial Intelligence & Robotic Process Automation in KYC

The demand of AI in KYC has increased in recent years to avoid non-compliance. It obliterates human efforts which in turn, reduces costs, errors and failures associated with Know Your Customer. According to the industry insiders, more than 12% of businesses are turning to automation and robotics to increase productivity, transactional efficiency and reduce non-compliance costs.

How Robotic Process Automation can help you?

Compilation of Customer Data

AI holds information about the client’s data and overall transaction summary from several systems, sources and departments. It stores and processes the data of client to the centralized system, thereby eliminating possibilities of human errors. Automation enables banks to procure a clear picture of customer’s accounts and financial history.

Monitor Regulation Laws

Client’s account’s monitoring is a tedious task as bank personnel have multiple accounts to look after. This drawback is overcome by AI as it continually monitors and processes customer information to the system. AIs automatically scrutinize dynamic regulatory system. This alleviates uncertainty of manual errors as machine reads and analyzes every information. Thus, automation in Know Your Customer will allow businesses to monitor the perils associated with customer account opening.

Help in Account Opening

RPA and AI speed up onboarding procedure by efficiently ascertaining credit limits of client. They monitor the risks associated with such account opening and sync new regulatory norms. They also screen every transaction of the potential client. This enhances the productivity of the business and protects from non-compliance losses.


The manual processes adds a lot to the increasing annual costs of compliance. According to a report by Thomson Reuters, the average money spent by a financial firm on KYC, AML and Enhanced Due Diligence (EDD) is around $50 million per year and the figure is expected to surge by 20% in the next four years. Automation reduces costs involved in processing and storing high volume transactions, avoids redundant manual tasks and boosts overall efficiency. According to the recent survey by Times of India, the average user verification through physical KYC costs near about Rs.100 whilst the same by automation costs Rs.15.

Effective communication

AI and RPA facilitate effective communication throughout all financial institutions on opening and closures of customer account. They ensure adherence to compliance norms and timely completion of all activities. AI not only reduces labor involvement but also saves time and effort in KYC onboarding process.

Enhanced Customer Trust

Automated authentication brings trust in online transactions. It eliminates access to client’s data to a few thus ensuring maximum control and reliability. Customers can rely on financial institutions as a result of improved data security and governance.


It is argued that introduction of RPA in customer account maintenance and other banking activities will lead to unemployment and low growth in wages of employees. There is no doubt that newer technologies demand new skill sets and applicability on part of employees, but they also boost productivity and output, which in turn creates more demand for jobs.

Artificial Intelligence has a great impact on KYC procedures. It takes compliance process to the next level. The use of AI technologies such as machine learning, natural-language understanding (NLU) and natural-language processing (NLP) can help analyze customer sentiment and customer feedback, nuances, accuracy and timely completion not achievable through humans. NLP systems can analyze documents to identify people, products and processes affected by legal and regulatory changes.

AI based analysis like link, text and pattern recognition evaluate complex web and cognitive engines and elicits conclusions from every piece of information. These methods are used to develop variables that can be combined with structured data processes. AI chatbots are used for communication with customers, which analyze their responses using NLP, making KYC process efficient and reliable.

What can AI do?

Artificial Intelligence can monitor over two million data points at a time to provide precision in decisions.
AI algorithms adapts to changing compliance regulations in seconds.
Customer onboarding takes place 10 times faster by AI than manual process.
AI will open customer account and apply for loans, credit card on behalf of customers
Artificial Intelligence will audit data and generate reports.
Thus, Artificial Intelligence is not only given due importance in recent years but is also seen as future of KYC and AML compliance processes.

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