Why outsourcing KYC solution is more effective than all in-house strategy?
First of all let us define what outsourcing means. (If you are well familiar with the term – just skip this paragraph as you probably will find little to nothing new in it).
Simply put, outsourcing is the process by which an organisation delegates some of its in-house operations or processes to a third party. While ownership or control of those processes generally remain with the parent company, third parties are responsible for carrying out and reporting on the predefined tasks.
The concept of outsourcing has been around for centuries already. The fabulous founding father of economics Adam Smith was one of the first minds to develop this idea as a part of his “Competitive Advantage Theory”. Over the course of the twentieth century manufacturing and financial industries transformed outsourcing from a loose economic theory into their core growth strategy. In the twenty first century many more financial institutions have joined the run due to tightened as never before anti-money laws and regulations.
Despite this reported growth, even today the pros of outsourcing are not well-understood. Especially when we are talking about KYC workflow optimising solutions. Many companies consider customers’ information as a key asset of their business and don’t feel comfortable to have it managed outside the corporate firewall.
So, the big question that still remains “is outsourcing KYC an effective strategy”?
Well, the answer is a definite yes. And if you are still doubtful about incurring the outsourcing strategy for your company’s KYC verification process – check out it’s long term benefits.
“It’s clearly a budget. It’s got a lot of numbers in it.”
— George W. Bush
1. General cost saving
The major benefit of KYC outsourcing is a huge cost saving. Yes, when you outsource, you don’t need to invest in infrastructure or employee recruitment neither training. These resources are already available with the outsourcing company. For enterprises of all sizes across all industries, outsourcing KYC solution can be a game-changer for the sales results, as well as bottom line.
Nobody is building own telephone network or railway system when they simply need to make a call or have a ride from point A to point B!
It wouldn’t be wrong to say that outsourcing helps to manage your KYC budget properly. And that’s exactly what you need – to generate a huge ROI while being successful in the long run of your business.
2. Development time
Outsourcing KYC is really about faster time to market, besides the ultimate access to better expertise and advanced technology, of course.
Typically such projects take ages to host and develop internally from scratch. Its not a rare case that company decides to use a third-party solution temporarily while developing own software yet finishes staying with outsourced solution for many years. Why to invest time and resources in something with the dead-end outcome? Sounds like pouring money down the drain, doesn’t it?
Outsourcing KYC helps your company strategically by enhancing your productivity while improving customer satisfaction. In short, it doesn’t only retain existing customers but also attracts new customers on board. And all of it is possible already today, without wasting precious time and resources on something that has so high risks to result in serious financial losses and reputational damage.
Usually companies offering KYC services have proven value proposition and well documented workflows simply because they are well past the intense learning curve and fine-tuning stage. If a company wants to make own solution it must have confident competence in many areas that are more likely not in the focus of it’s primary business. Failing to provide required competence to in-house team often leads to creating a poor product, that wreak havoc on a company’s reputation or/and service delivery to it’s costumers. On the other side of the coin outsourcing qualified KYC software solution is a great way of maintaining a healthy and friendly relationship with existing, new and prospective customers. So-called, outsourced competence helps to increase the success of your customer onboarding, while increasing the integrity of KYC processes in your system. Its a perfect win-win situation!
Outsourcing KYC solution is more likely a way for your company to avoid large, up-front time and money investments along with other expenses associated with internal development of own product. Its not enough just to buy an access to a database, neither purchase huge data tiers for a fortune and without any CRM incorporated. It is crucial to make CRM work properly apart from having options for solid visual output, so that even a non-technical person could operate it .
This being said, companies who outsource KYC services not only gain flexibility, cut costs and deliver better products but also consolidate existing competitive advantages across key financial markets. While third-party AML and KYC service providers are left to make extensive investments in technology, methodology and people, recruiting them companies are free to focus their resources on better meeting customers’ needs.
5. Analytics and Flexibility
The analytics and flexibility levels of a third party KYC provider are extremely high which is seldom found in any in-house team. Everything related to frauds, risks and compliance must be constantly monitored, improved and optimised. Outsourcing KYC enables companies to gain a competitive edge and establish lean and flexible operations across the value chain to deliver products and services faster and cheaper. From adapting to a plethora of consumer demands to constant monitoring and optimisation of onboarding, operational risks, adverse media screening and customer support functions, KYC outsourcers do it all like a pro and give your customers the best of client experience.
outsourcing KYC solution can be your gateway to customer satisfaction and success. From lower employee turnover to high profits, from having access to better software and cutting-edge technology, to faster in market time – outsourced KYC and AML service providing company can give you everything in an optimum budget.
Generally speaking, outsourcing enables financial organisations to improve operational performance, vastly improve speed, reduce operational risk and increase efficiency through better consolidating and centralising functions. Financial institutions that strive to keep everything in-house typically end up developing a series of vertically integrated silos that result in extensive duplication and redundancy across businesses and markets.
The trend for KYC outsourcing is growing day by day. Earlier only small and mid-sized companies used to extract its benefits. But, with its numerous advantages, even the large-sized organisations are jumping on this outsourcing bandwagon.
So, if you want to get the best of KYC solution too, opt for outsourcing.
BASIS ID is a great example of choosing right outsourced KYC and AML solutions’ provider. The winner of Finnovasia and Slush; certified Mastercard’s partner, who has verified more than 1.500.000 users already – we provide the best solution to business tasks of KYC and AML verification procedure.
We are confident that you can get more customers and do it faster and cheaper than you are doing it now.
For this reason, we have created a solution specifically for your business tasks.
We have the adequate skills and expertise to cater to all your outsourcing needs. Feel free to reach us for any queries and additional information. We will reply as quickly as possible.