How CRM Enables KYC Compliance in Banking, SIM Regulations in Telcos

In an effort to prevent money laundering, the financing of terrorism, and the use of mobile phones in terrorist and fraudulent activities, compliance to Know Your Customer (KYC) and Subscriber Identity Module (SIM) registration regulations has become mandatory in most countries.

This initiative compels financial services and telecommunication providers (telcos) to, as the name suggests, "know their customers." In both banks and telcos, KYC typically requires certified copies of ID documents and proof of residential address.

In addition, the management of KYC and SIM registrations requires:

1. Work flow and enterprise content management to manage the capture, storage and easy access of electronic copies of ID documents and proof of residential address
2. CRM software to keep track of customer compliance and to manage campaigns to register those customers that are non-compliant

While KYC and SIM regulations aim to address important concerns, they also have negative effects on banking and telco organisations. For example, clients' bank accounts that are deemed non-compliant with KYC requirements are often closed as banks work to ensure compliance. These efforts, however, can result in unnecessarily lost clients who suffer great inconvenience when their accounts are closed without their consent or permission.

Similarly, in telcos, the SIM cards of customers who are not registered, and are thus non-compliant, are required to be deactivated after a certain grace period as prescribed in the regulation. Again, this causes telcos to lose customers unnecessarily and for customers to suffer inconvenience.

As a result of regulatory issues, both banks and telcos are forced to make investments that assist with the enforcement and management of KYC and SIM compliance. Since these investments are imposed and do not serve to advance the business in any competitive way, ...