Carrying out Know Your Customer (KYC) tasks is growing increasingly time-consuming — and costly — for banks around the world, according to new research from KYC provider Fenergo, which found that the average KYC review for a corporate client now costs $2,598.
Fenergo’s study of more than 1,100 C-level executives across corporate and institutional banks found that not only has the average cost of a commercial KYC check gone up by 17% from 2022, but these processes are also taking longer to complete. Globally, banks took an average of 95 days to complete a KYC review in 2023, up from 84 days last year.
This trend is particularly stark in the UK, where financial institutions are spending on average 17 more days to complete a KYC review this year than in 2022. Customer due diligence has been of special interest in the UK amid a government review of banks’ processes for dealing with politically exposed persons (PEPs), sparked in part by Brexit leader Nigel Farage having been dropped by his bank.
Adding to the mounting strain on banks is a worsening talent shortage, with the global average number of people involved in KYC tasks having fallen by 14% in the last year. And nearly half (48%) of banks globally said they have lost clients due to slow or inefficient onboarding processes.
