In keeping up with the rising customer base, banks across the globe need to process the Know Your Customer (KYC) forms faster, allowing for volume spikes whilst maintaining a very high accuracy level and end customer satisfaction
Datamatics rolled out a solution for a large PSU bank in India to enable faster processing of KYC forms and utilizing the information to create a system for efficient customer services. The client is a large bank with assets over $2 billion and has over 2500 branches across India. The bank provides personal and corporate banking along with ATM, net banking, tele-banking and forex facilities to customers in India, UAE, China and Australia.
The client with its global presence, faced challenges in processing KYC for an ever-increasing customer base. The bank has mad provisions for its customers to open and operate accounts in multiple ways like NRE, NRO, NRNR, FCNR, Power of Attorney. With this, the bank required a faster processing of KYC forms, allowing for volume spikes whilst maintaining a very high accuracy level and end customer satisfaction.
Rahul Kanodia, CEO and vice chairman, Datamatics Global Services said, "Banks across the globe face a challenge in adhering to the mandatory regulatory compliance, while aiming for higher customer satisfaction level in terms of faster activations and accurate data exported in core banking application while maintaining process efficiencies." He further added, "Our banking client having over 3500 branches in India and track record of yoy profitable growth was also facing similar challenges with processing of Account Opening forms. The client wanted to increase efficiency and lower TAT in a cost effective way. Seasonal peaks and unpredictable monthly spikes were also a challenge while maintaining tight TATs."
The first and foremost challenge the bank faced was with regards to the processing of KYC forms wherein it was becoming difficult to manage the volume spikes. Also, the account opening cycle times were high and the accuracy levels were very low.
The bank's existing workflow was unable to track documents, KYC processing and exception handling was been done manually. Also, as per government regulations, physical forms could not be sent out of the facility and output of the data processed had to be compatible with the Core Banking System.
To ensure flow of events, the bank had to resort to deployment of several number of resources for increasing customer satisfaction, which lead to an increase in operating costs thereby affecting margins. Above all, due to the present system the bank face a prospect of losing customers to its competition.
Kanodia said, "Datamatics with its years of experience and expertise in Data and Information Management, provided a platform based outsourced processing service. The service includes technology deployment which is highly customized to bank's requirement. The technology components comprise of intelligent data capture tool for accurate data capture and validation and hosted workflow for exception handling and complete process visibility."
The Datamatics team embarked a feasibility study which was followed by solution design. The team mapped the customer's process and proposed to be an end-to-end service provider.
The solutions included:
- Redesigning KYC forms.
- Setting up scanning and mail room at customer premise.
Data processing and validation using KYC form processing, powered by i-Q. This solution will manages the entire KYC processing cycle, right from receipt of documents via fax, mail or courier to scanning, data processing, document management, archival, retrieval, and generation of MIS reports. i-Q has all business rules and basic validation, like PAN card number, built-in. As a result, high level of accuracy is achieved at the first level.
Providing the 'Classify' application after scanning, in order to differentiate and segregate the KYC forms from the supporting documents.
Verifying and keying of critical fields in second stage. Converting the data after a final dispatch check.
The built-in 'IndiaNa' feature used for cross-checking and validating all Indian names and addresses.
Scanning images, snippets of signature files and output data in CSV format to be delivered to the bank via secure FTP. It also has an ability to integrate with the customer's core banking system.
Installing Datamatics' iPM or intelligent process manager, for MIS, exception handlign and document approval.
The workflow in KYC form processing, powered by i-Q had the following features:
Color drop-out technology, which efficiently drops out specific lines from the image thereby increasing OCR quality. Image enhancement tools used as a part of pre-processing stage, which removes noise on the image. This also helps in improving the OCR quality.
Usage of topography to swiftly identify fields to be captured.
Usage of ICR and OCR engines as the data on the form was either handwritten or printed. This increased the quality of data capture.
Data validation using master databases.
Conversion routines to export data in the format which compatible to the bank's Core Banking System.
Post deployment of solution by Datamatics, the PSU bank has garnered benefits at various quadrants. Kanodia said, "By outsourcing this process, the bank has improved data accuracy levels upto 99.5% while reducing cycle time from 8 days to 2 days."
The bank has managed to reduce cycle time from 8 days to 2 days due to automation. The overall quality has increased from 95% to 99.5% along with increase in efficiency from 900 seconds per KYC form to 265 seconds per KYC form.
Furthermore, the bank has managed to significantly reduce customer's operational cost. Above all, it has gained a more efficient system and effective use of business rules while processing KYC forms.
In a nutshell, KYC form processing, powered by i-Q significantly reduced costs and turnaround time, improved quality and speed, and provided several other benefits. The high quality accurate database population provided increased downstream benefits and savings.