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A utility model would provide a single standard platform or framework that all providers could simply plug into and quickly enable eKYC at different levels of requirement, depending on the service provided.ĭigital ID and digital onboarding would provide instant access to financial services for the World Bank’s estimated 1.7 billion unbanked, while full digital ID enablement will potentially add 3-13% of a country’s GDP by 2030, according to a 2019 McKinsey report on digital ID innovation.Īt its core, KYC is straightforward. In recent times, financial services providers in Bahrain, the Nordics, the Netherlands, and Abu Dhabi have made progress in creating e-KYC utilities.
Thirdly, transitioning KYC to a digital – and ideally a utility – model is quite simply a huge opportunity. Evolving AML and compliance regulations globally will continue to exert pressure on KYC complexity and costs.
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A report on the cost of KYC by Refinitiv found that 52% of KYC costs are attributed to operational staff who primarily manage manual verification processes. Secondly, the banks cannot sustain this drain on resources. This cannot continue.įirstly, customers will not stand for slow, in-person onboarding processes in today’s digital era, especially considering the pandemic experience. Covid has accelerated efforts to move to remote and online procedures, but the results are piecemeal and lacking in standards. KYC is increasingly critical as the rush to go digital means customers demand faster access to services, while anti-money laundering requirements globally are evolving and becoming more demanding. Yet, many firms’ customer on-boarding and Know Your Customer (KYC) procedures remain archaically manual, lengthy, costly, and burdensome. Even traditional banks are jumping on board, with a Hong Kong Monetary Authority ( HKMA) study showing 86% of incumbents are currently integrating fintech applications.īanks, insurers, and financial service providers have succeeded to varying degrees in digitalising their businesses.
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At an industry level, key pieces are also falling into place, with Hong Kong’s regulators ushering virtual banking and insurance licenses, plus open banking frameworks. Here Leung discusses the possibilities posed for the economy of Hong Kong in the adoption of eKYC, and the values that could be derived for the region from such a technological shift.įintech in Hong Kong is primed for a post-pandemic surge as even the most traditional consumers and businesses have now embraced digital as a way of life, especially in light of social distancing measures under Covid. He works closely with major fintech stakeholders including global financial services institutions, fintech companies, accelerators, innovation labs, investors, regulators, and universities. And as the race to digital continues to sweep up many traditional, and often archaic, forms of financial servicing, Hong Kong’s KYC procedures are highly encouraged to follow suit.Īs Head of Fintech at InvestHK, King Leung is responsible for attracting Foreign Direct Investment into Hong Kong, and to encourage the vibrant fintech ecosystem in both Hong Kong and the Greater Bay Area (GBA). The importance of knowing your customer (KYC) can never be understated.
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