• 49% of compliance professionals surveyed say it will become harder to comply with regulation over the next year
  • Two-fifths of respondents expect customer onboarding times to increase over the next five years
  • Over a quarter (28%) say that it would take between three and four working days to identify and compile a report on a client that posed a regulatory risk
  • 75% believe that CDD (Customer Due Diligence)-related delays have a negative effect on the customer experience
  • 50% plan to invest in technology in the next five years to respond to regulation

A new study by Dun & Bradstreet shows compliance professionals anticipate a more complex and uncertain future, which will increase data governance challenges and cause difficulties in the customer journey.

This quantitative research was carried out in November 2016 by independent research company Censuswide. Responses were gathered from 100 compliance, legal and operations professionals within UK banks and financial institutions.

The research found that almost half (49%) believe that it will become harder for their organisation to comply with financial regulation over the next 12 months. Reflecting this, two-fifths (40%) of compliance professionals also expect customer onboarding times to increase over the next five years.

42% of respondents say it currently takes them three to four working days to onboard a new customer, with 12% saying it takes up to six working days. Three-quarters (75%) of respondents believe that CDD (Customer Due Diligence)-related delays have a negative effect on the customer experience, with increased regulation resulting in significant business impact such as taking on less business and a third (32%) of respondents saying they have had to build larger teams to manage the process.

About half of respondents (45%) say that monitoring the compliance status of customers on an ongoing basis is “fairly” or “very” difficult. Moreover, over a quarter (28%) say that increased time – between 3 and 4 working days – to identify and compile a report on a client that posed a regulatory risk could strain sales and compliance teams, with the potential for revenue loss.

“By valuing the positive impact of a healthy compliance function on the rest of the business, banks and financial institutions can create CDD processes that will meet current and future demands,” said Thomas Cosgrove, Strategy Leader, Global Compliance Solutions, Dun & Bradstreet. “Through intelligent compliance practices, teams can not only manage risk effectively, but actually improve the onboarding process, thus enhancing the customer experience and creating a competitive advantage over rival firms. An effective compliance team not only protects the bank from risks (financial, regulatory, reputational), but also serves as a showcase of the institution’s commitment to responsible business and its ability to protect the interests of customers.”

Compliance professionals believe that using technology is the way to respond to the changing regulatory landscape, with 50% saying they will need to invest in solutions within the next five years. Currently, few organisations are proactively enhancing their level of sophistication around CDD, as only 7% have taken steps to centrally manage and automate procedures. Compliance professionals recognise the advantages that automation would bring to the onboarding process, in particular, including faster times to revenue (60%) and improved customer experience (56%).

“In an age where the regulatory landscape is becoming more challenging and evasion techniques are growing in sophistication, businesses should look to arm their compliance teams with the best tools available,” continued Cosgrove. “Intelligent application of robust data can automate parts of the compliance process, enabling knowledge workers to focus on exceptional cases, improving onboarding speeds and focusing scarce resources on higher value activities. The latest technology is important, but systems are only as powerful as the information that flows into them. Ultimately, teams must ensure the quality and timeliness of the data they use is as robust as possible.”