Insights into
successful
CDD execution
Smart data and technology
August 2022
Contents
01 Introduction 2
02 Technology for effective CDD 3
03 A Smart CDD future 5
04 A 360-degree view of the customer with Salesforce 6
05 In summary 7
06 KPMG’s firms’ alliance with Salesforce 8
07 Contacts 9
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entities provide no services to clients. All rights reserved.
Insights into successful CDD execution 1
Introduction
For fnancial institutions of all sizes, fully enhanced Customer Due
Diligence (CDD) to satisfy Financial Crime requirements remains elusive,
with signifcant cost, risk and resource pressure, pitted against the need
for greater automation and a more digital customer experience. For
fnancial institutions in the UK, the cost of anti-money laundering (AML)
compliance is approximately £28.7 billion per year, with over 50% of that
spent on satisfying customer due diligence.1
This is set against the backdrop of highly publicized large regulatory fines
and signifcant fnancial losses from theft and fraud, which has seen huge
spikes during the pandemic (UK loan and mortgage fraud was up by 675%
in 2020).2 It remains to be seen how much of this can be attributed to
pauses in CDD programs, which created backlogs of cases that were put
on the backburner while banks administered mortgage payment holidays
and COVID loans. Meanwhile start-up fin-techs may need to rectify CDD
shortcuts taken as they quickly scaled up.
Financial institutions are looking for delivery models to run their compliance
programs including CDD onboarding, periodic and event driven reviews,
and remediation more effciently. They are seeking a CDD program that
complies with regulatory requirements, supports effective operations,
offers a better customer experience, helps to implement technology, and
enhances data for improved decision making.
This report, we will explore the role technology and automation has to play
in building a CDD program fit for the financial institutions of today.
1
LexisNexis, ‘Cutting the costs of AML compliance’ report
2
Fraud Barometer January 2021 (kpmg.uk)
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Technology for
effective CDD
Technology has always been integral to the CDD
process and has predominantly been used to record
Today’s technology landscape “In my experience, the more
the collection, collation and updating of CDD data Technology in the CDD process varies from
thought given to thinking about
points and documentation, often using large teams and organization to organization. There are a variety of tools a fnancial crime program being
manual processes to maintain the information held. and systems available, ranging from simplistic tools
When executed well, the combination of technology which address specifc components of CDD to
an integrated and
and process has enabled Financial Institutions to advanced tools which look to fully enhance wide- interconnected program of
accurately assess financial crime risks associated with ranging processes.
customers in order to make the correct risk-based processes that has data
For many organizations, legacy CDD systems and
decisions to on- board, retain, and where necessary, exit
processes commonly lack automation, they require
fowing through it, with
them.
multiple, and often disconnected components to be used appropriate feedback loops
However, we know that the world of CDD does not stay in conjunction with each other, in order to complete the
static; financial institutions are struggling to keep pace full end to end process and ultimately do not provide a
between the various elements,
with their obligations to maintain customer CDD records 360-degree view of all customer information. Legacy aiming to ensure information is
in the face of changing regulations, more sophisticated systems tend to have issues in the data model sitting
criminal behaviors and infexible systems, all at a time behind them, which aren’t based on case processes
kept as up-to-date as possible,
when there is a shortage of skilled resources to perform and lead to reporting or processing errors, as well as a the more effective and effcient
the work and costs are rising. A perfect storm you lack of agility and inability to develop and make required
might argue! changes after implementation. The availability and
an organization will be.”
Today, this report will explore the use of technology quality of both quantitative and qualitative management Geraldine Lawlor,
commonly used in the CDD process, how it might look in information varies enormously, but more often than Global Head of Financial Crime,
the future, and how KPMG professionals, working with a not is limited in value to organizations. The same KPMG International
global technology leader, is balancing present and future can be said with respect to the analytics capability
requirements. currently available through CDD systems which are
sub-par, resulting in poor data and failure to
provide good reports and insights. Analytics should
give an insight into the business and bring together
the broader organizational strategy.
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Core CDD activities such as QC, QA, escalations, and customer outreach tend to be The right CDD system can also help reduce manual work by delivering automated
completed outside of CDD systems and therefore add additional time to processing, transaction review processes, creating an overview of customer account activity. It
result in negative customer interactions, which can often lead to duplication of effort can look for risk factors such as high-value payments, unusual infow versus outfow
for CDD teams. Outreach is typically the least technologically advanced activity in of cash, and cross-border payments, for example, making sure that CDD teams
the CDD process. Outreach tends not to be multi-channel enabled (i.e. email, SMS, focus on the transactions that really matter.
telephony and letter) and requires significant manual intervention and repeated
The leading systems should have powerful analytics capability to provide insightful
attempts to contact customers.
and meaningful management information to both financial institutions about their
Other core fnancial crime processes which require access to CDD information, such customers and to the CDD teams themselves to manage the CDD process. The
as transaction monitoring are rarely integrated into the same suite of technology ability, for example, to analyze the impact of a change to country risk ratings to
solutions. This typically results in sub-optimal processes which take longer to your customer base, or being able to determine which aspects of the CDD process
perform and at greater cost.
your teams struggle to get right should be available on a near
But all is not lost. There are new and emerging technology platforms out there real time basis. Just think how much better your decision making would be if
which do provide answers to common operational CDD challenges which affect you had this information at your fngertips!
organizations daily.
How can you accelerate optimization now? TherightCDDtechnologycansupportwith:
Innovation is key to managing costs and effort within the CDD environment with
several areas of advancement on the horizon. The immediate future is focused on a
future proof CDD system that offers a seamless digital journey for fnancial
institutions and their customers. It must connect the front and back offces with Reduced repetitive
customers, while integrating data from internal and external sources (using Increased process manual work so that
Application Program Interfaces – APIs) to automatically update information. A reduced cost of efficiency and risk analysts can focus on
compliance management higher value tasks
The use of Natural Language Processing can enhance document validation and
interpret CDD standards into a series of rules or algorithms. This can help optimize
analyst and QC average handling times, reduce resource requirements and
improves the quality of cases.
Process certainty by
Sophisticated screening tools that use machine Learning and AI to analyze An improved digital selecting an out-of-the- Fast and simple
potential sanctions and PEP matches or adverse press articles should be journey from onboarding box solution which is pre- configuration of the
integrated into the CDD process. This can have potential benefits of improved to reviews for the configured to industry technology for quick
accuracy and consistency when auto-decisioning matches / alerts for obvious false customer standards uptake
positives, allowing CDD teams to focus their attention on the matches / alerts that
really matter.
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A Smart CDD future
To help organizations overcome the challenges of CDD Integrated with third parties for data
covered in our CDD insights series, KPMG firms have enrichment, the platform is underpinned
developed a solution powered by Salesforce, called by a policy lineage tool to ingest CDD
Smart CDD. policy and standards and turn them into
CDD requirements, allowing for clear and
This solution offers a wide-ranging solution which has
auditable decision making throughout the
been built with KPMG’s professionals’ deep understanding
CDD process with full lineage back to
and experience of CDD processes and regulatory
policy. A fully configurable risk engine
requirements. Coupled with KPMG’s firms’ managed
calculates the customer risk rating and
services support model to take on and run the service, this
when combined with policy rules
addresses CDD backlogs, BAU onboarding processes as
engines, enhances processes for faster
well as periodic review cycles.
and more accurate collection and
Smart CDD is run on the Salesforce Service Cloud and recording of CDD information. The result
leverages Salesforce Customer 360 data capabilities to provides CDD teams, Relationship
bring customer data into one unifed 360-degree view. It Managers and importantly the actual
offers multi-channel communication options including customer with a simple and effective
email, telephony, and Digital Portals for uploading user experience. Other potential Smart
documentation, with information stored centrally. CDD benefts include:
Capacity planning and Data insights and Collaboration across Process automation
scheduling optimization analytics for visibility teams to help solve with guided workfows,
drawing on forecast into key metrics to help issues real-time updates and
demand improve operations and alerts, automated
customer satisfaction document generation,
AI recommendations
and in-context guidance
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A360-degreeviewofthe
customerwithSalesforce
The COVID-19 pandemic has changed the way that Having a Customer Relationship Manager platform “Financial crime still continues to
people work and live. This presents an opportunity which promotes cohesive internal operations is key
challenge and catch-out even the most
for organizations to accelerate their efforts to build for bringing in up-to-date customer sales data during
direct and trusted relationships with their customers the onboarding process into Smart CDD. Salesforce’s mature organizations. Smart CDD offers
and deliver success from anywhere. However, a CRM platform, Customer 360, is a completely digital- a powerful wide-ranging solution with
challenge is that those relationships are no longer in frst platform to meet the digital needs of any business the Salesforce Customer 360 at it’s
person, but are now digital. Every business, B2B or size in any industry. Should an organization already
B2C, across every industry, should deliver connected have Customer 360, integration is seamless, although core, designed by KPMG subject matter
digital experiences that are trustworthy. Smart CDD can integrate with other CRM systems if professionals, delivered as a full
A key driver of this is having the right technology in
required. Customer 360 empowers organizations to managed service to help reduce time-to-
meet the customer where they are, across
place. Smart CDD is built with several Salesforce value and rapidly deliver on key KPIs
applications in Sales, Service, Marketing, Commerce
components including Service Cloud, which provides such as caseload reduction, reduction in
and all other touchpoints. It gives all teams a shared
Smart CDD’s Analyst workfow, processes, risk and
policy rules engines and has been reported by
view of their customers, so they can work together to cost of compliance, improved customer
build lasting, trusted relationships and deliver the experience, and data-led regulatory
companies to provide 30 percent higher customer
personalized experiences their customers expect. The
satisfaction and 28 percent increase in Agent
system is also flexible and scalable and helps compliance.”
productivity,3 by providing Analysts with a 360-degree
employees to be more collaborative and productive.
view of the customer in a single, powerful console. Christopher Schyma
Senior Regional Vice President - Managed
3
Salesforce Customer Success Metrics Survey, conducted 1st May – 15th June 2021. Services, Salesforce
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In summary
A successful CDD program not only uses automation to drive effciencies by
collating data on its customers and aligning policy with CDD rules, but along the
way, helps to ensures that the customer journey is as pain free and as
straightforward as possible. Automation should be underpinned by dynamic
policy rules and decision-making processes, with clear auditability and reporting
capability. Firms that make the leap to a centralized broad solution which gives a
view of the customer can ultimately reduce the risk of non-compliance, become
more cost and time effective and realize high quality outcomes.
To explore this topic further please get in touch via
www.kpmg.com/uk/smartcdd.
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KPMG firms’ alliance
withSalesforce
Modern customers expect exceptional, and personalized experiences at
every interaction. Whether you serve businesses or consumers, your
customers require efficient, secure transactions across all channels,
responsive and transparent service and support, rapid and accurate results,
and high-quality products and services.
To meet these expectations—and do it profitably—you should align front,
middle, and back-office operations across enterprise functions – a
connected experience.
With a shared vision for connected enterprises that are hyper customer
focused and aligned, KPMG firms and Salesforce help digitally transform
your business to compete and succeed in today’s world while being
prepared for the future. KPMG’s professionals’ experienced driven approach
to enterprise-wide digital transformation—Connected.
Powered. Trusted.—provides industry-focused, cross-cloud solutions and
accelerated business results that can align with how companies operate their
business on a day-to-day basis. By tying the front office to the rest of the
organization, KPMG firms and Salesforce help you to deliver exceptional
customer experiences.
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Contact
Simon Mansell Mike Eaton Oliver Noble
Smart CDD Solution Owner IS Smart CDD Lead IS Smart CDD Lead
KPMG in the UK KPMG in the UK KPMG in the UK
T +44 7715 705172 T +44 7802 637885 T +44 1132 321000
[email protected] [email protected] [email protected]
John Herring Nicci McShane Jamie Spring
Technology Lead Director Director
KPMG in the UK KPMG in the UK KPMG in the UK
T +44 7740 923537 +44 7879 800456 T +44 7833 482782
[email protected] [email protected] [email protected]www.home.kpmg.com
home.kpmg/socialmedia
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