How to create effective customer due diligence for banks and increase profitability

Customer Experience: How it affects a bank's profits

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Discover our latest Summer product release

We're excited to introduce you to our latest product release. This release includes integrating PEPs and Sanctions data, which brings a new dimension to risk management, enabling you to safeguard your business against potential threats effectively. The Experian Delphi Score upgrade delivers unparalleled credit risk assessments, empowering you to make confident lending decisions. With Experian data now available within our API, acquiring crucial data has never been more seamless.

More Engagement Signals: Improved monitoring solution

New credit and risk-based triggers provide alerts to changes in a customer's creditworthiness and risk profile. This proactive approach enables you to make informed decisions swiftly and mitigate potential risks.

ComplyAdvantage PEPs and Sanctions integration: Enhanced compliance and risk mitigation

Staying compliant with regulations is a paramount concern for Financial Institutes. With our latest product update, we have integrated ComplyAdvantage PEPs and Sanctions data to provide a powerful onboarding and risk management tool. Now, you can effectively screen individuals and entities against global sanctions lists and identify high-risk customers, ensuring your business stays one step ahead of potential risks.

1000s of sources contribute to the comprehensive global coverage of Sanctions, PEPs & Watchlists, resulting 70% reduction in false positives.

Experian Delphi Score upgrade: Better credit risk assessment

The Experian Delphi Score is renowned for its precision in assessing credit risk. The upgrade incorporates Experian's latest credit scoring advancements, providing even more accurate and insightful credit risk assessments. Allowing you to make informed decisions confidently, minimise risks, and optimise your lending processes.

Experian Credit data within our API: Seamless data integration

We’ve introduced Experian credit data within our API to streamline your acquisition and onboarding process. Seamlessly integrate up-to-date Experian datasets into your systems, applications, and workflows. The integration enhances your data-driven decision-making capabilities and saves precious data acquisition and processing time.

New API modules: Tailored for maximum efficiency

Recognising the needs of our clients, we have expanded our API offering with a range of new use-case-focused modules. Our API library now offers specific datasets that align perfectly with your business requirements to help acquire new business, accelerate onboarding, and keep customers for life. 

To explore our latest release, or learn more about our services, schedule a demo to see how these new features will empower your business through comprehensive data and actionable insights.

Six top trends that are making banking compliance teams rethink customer onboarding strategies in 2023

Time-to-revenue is an increasingly key metric for banks, whether they be traditional, challenger or neo. But banks are operating in an incredibly fast-paced, complex, and rapidly evolving environment, which can have significant detrimental impacts on the speed and efficiency of corporate customer onboarding processes.

The equation is simple - the longer onboarding takes, the slower the time to revenue.

With McKinsey’s Global Banking Annual Review predicting that corporate customers sit at the heart of a predicted 9% increase in global banking revenues over the next two years, delivering a fast, efficient, and compliant customer onboarding process is more critical than ever before. Get it right, and banks can enjoy competitive differentiation, greater efficiency, and revenue growth.

But what does getting it right look like?

Here are 6 key trends impacting the evolution of customer onboarding strategies in 2023:

1 - Regulation

Regulators are tightening controls in an attempt to make it harder for criminals to find weak links in the defence mechanisms of banks. It’s a constantly evolving regulatory landscape that presents a huge drain on resources and expertise. But with huge fines and reputational damage at stake compliance is non-negotiable.

As AML and other regulatory frameworks tighten, customer onboarding strategies must also evolve so that they can adapt to developments. The risks of not doing so includes creating compliance gaps, increasing costs, and overburdened teams.

But banks must also balance this against customer experience…

2 - Customer experience

Complex onboarding processes for new corporate clients can take up to 100 days. This can lead to significant dissatisfaction and abandonment, which is costly – banks are literally losing millions every year due to poor onboarding experiences.

Corporate banking customers want a service that’s fast, efficient, and frictionless. KYC processes present the most significant bottleneck to achieving this. Onboarding delays and frustrations typically result from the vast amount of data and documentation banks require for compliance.

Customer onboarding strategies must therefore review how data is acquired, processed, verified, and risk assessed if they are to deliver the seamless experiences customers demand.

3 - Identity verification

In today’s global banking environment, identity verification is tougher than ever. Banks must access real-time identity information across a wide range of national, international and government data sources. In addition, that must undertake watchlist screening against both local and global sanctions, and politically exposed persons (PEPs).

When rethinking their customer onboarding strategies banks must ensure that their identity verification capabilities meet both regulatory requirements and customer expectations for speed and convenience, as well as ensuring they have the inbuilt agility to remain compliant as the geopolitical and regulatory landscape evolves.

4 - Understanding complex corporate structures

Increasingly complex corporate structures and fragmented ownership data obscure a complete view and prevent banking compliance teams from effectively assessing risk, which in turn creates more friction in the onboarding process.

Complex corporate structures, often by design, do not lend themselves to ease of analysis. Identifying who owns and exercises control is incredibly time consuming, expensive, and fraught with inaccuracies that expose banks to both regulatory and reputational risk.

Customer onboarding strategies that can map out and visualise corporate ownership will be able to manage risks in the most accurate and cost-effective way possible.

5 - Environmental, Social & Governance (ESG)

Banks are under pressure to expand customer due diligence (CDD) procedures to include risks posed by ESG factors when assessing prospective customers. Whilst the intersection of ESG, KYC and onboarding is new, integrating ESG into onboarding processes is now a necessity. ESG is increasingly part of the scope of regulatory activities, presents legal and reputational risks, and is a top agenda item for investors, customers, and the public-at-large.

As a bare minimum customer onboarding strategies need to be cognizant of customer ESG practices and how prospects manage the social and environmental risks those pose. But best practice moving forward would be to incorporate new abilities to include ESG specific risk factors based on a customer’s potential risk exposures including the nature of their industry, countries of operation, sources of funds/wealth, as well as proactive measures such as adverse media screening.

6 - Emerging payment fraud risks

Authorised push payment (APP) fraud is one of the fastest growing types of scams, one that has seen banks lose £145 million in the first half of 2023 alone. From 2024 a new Confirmation of Payee service will help banks ensure payee names and account details match before undertaking transactions, but in the meantime, advanced KYC verification methods during the onboarding process can help prevent fraudsters from entering the system

Accessing detailed financial and historical company intelligence (shareholders, group structure, ultimate beneficial owners and more) from verified and validated sources, contextualised and mapped ensures nothing is missed at any stage of the onboarding process. Likewise, identify key events like CCJs or Gazette notices immediately, by checking potential customers/merchants against global PEP and sanctions lists can help banks prevent payment fraud and keep bad actors out.

How FullCircl can help banks evolve next-generation customer onboarding strategies?

FullCircl is a game changer in onboarding acceleration.

It’s a Customer Lifecycle Intelligence (CLI) platform that allows banks to overlay policies and risk appetite across trigger changes in their customer base. It also uses automated data collection and checks and connects data points to expose potential risks across networks of people and businesses.

The overall impact is to helps banks accelerate onboarding; rapidly reduce compliance challenges and financial risk; acquire validated customer data; and drive consistency and transparency. These factors help speed up time to revenue.

Want to revolutionise your customer onboarding strategy in 2023? Get in touch to discuss your needs.

Embracing the future: Why underwriters will survive and thrive with data

We recently spotted an article in Insurance Times in which Hubb Insure’s COO Ed Halsey predicted that underwriters will be ‘dead in the water’ in just 10 years as a result of data becoming more prominent in the insurance market. He claimed that relationships were too prevalent in the sector and that “all things are better done through data”.

With data becoming more essential in the insurance industry Halsey suggested that underwriting could soon become a thing of the past.

As the provider of Customer Lifecycle Intelligence (CLI) , powered by data analytics, artificial intelligence (AI) and machine learning (ML), you might think we’d agree. That we have some masterplan to automate underwriting to the extent that humans are no longer required. But you’d be wrong.

We align ourselves more with another commentator from this story. Phil Williams COO at Clear Group felt that underwriters would continue to exist despite the very real strides organisations are making in the use of AI and ML. He predicted instead that humans would continue to play an integral role in the underwriting process.

We too believe underwriters are better with data. So, let’s explore how data and insights are augmenting human underwriting rather than replacing it.

The digitised underwriting advantage

Underwriters with the most advanced data and analytics capabilities enjoy better operating results and performance, according to a recent report from McKinsey. The global management consulting firm claims that underwriters can see loss ratios improve three to five points, new business premiums increase 10 to 15 percent, and retention in profitable segments jump 5 to 10 percent.

Instead of being dead in the water, McKinsey believes underwriters of the future will be “portfolio managers”—empowered by artificial intelligence (AI) and digital - operating like hedge fund managers with increased leverage, scale, and insight. They believe underwriters will:

• Be able handle substantially larger books of business with more precision and control
• Use data throughout the underwriting process to inform underwriter decisions in prioritisation of prospects, validation of exposures, policy structuring, and pricing
• Rely on continuously evolving risk models that incorporate ever-expanding views of risk characteristics, tailored by line, segment, and emerging loss trends

Let’s explore how.

Increased precision and control

The process of receiving an inquiry, assessing the risk, and delivering a quote back relies on a wide array of customer and market intelligence. Data and technology can optimise the process enabling underwriters to work with increased speed, precision, and control.

Rapidly unifying data from billions of sources (both structed and unstructured) to optimise workflows, reduce risk, attract capacity, and reduce speed to quote. Whilst also allowing underwriters more time to focus on improving the customer and broker journey, winning, and retaining more customers, brokers, and markets, and operating larger books of business.

Rapid triaging of submissions

A hard market means an increase in propositions received from the broker market, but with reduced capacity. Thanks to advances in data science underwriters can, at the click of a button, screen companies against key financial metrics, flag potential risks & gaps in information and be alerted to potential moral hazards, including PEPs and Sanctions, that could prevent them placing the risk on cover.

Better decision making and precision pricing

The technical task of assessing each risk and making decisions about terms, ratings, exclusions, and pricing of a risk has always been part of the dark art of underwriting. Carefully leveraging data and technology augments this fundamental skill, allowing underwriters to making better, more intuitive decisions, faster.

Surfacing millions of structured and unstructured data points and leveraging AI and advanced analytics underwriters can build a complete 360° view of a customer risk profile and can therefore get to risk selection faster with improved decision-making, more accurate pricing, and improved loss ratios.

Proactive Risk Modelling

In a dynamic risk landscape underwriters are increasingly required to explore ways to make risk acceptable for insurance coverage, as well as keep track of emerging risk profiles. And they need to this at scale. But, in reality, without knowing the full story of a business its market and other external factors, underwriting at scale is difficult to get right – and pricing accurately and competitively is even harder.

Using a rules engine allows underwriters to automatically identify if a prospect fits its risk appetite. AI and ML can also be leveraged to learn from historical cases and classify new risk categories based on analysis of rich, contextualised data.

Continuous risk mitigation

With advanced data analytics and workflow automation customer lifecycle risk monitoring can be done proactively, not reactively. Likewise, MTAs can be addressed far more easily, and underinsurance avoided by using rules to automatically flag the changes underwriters need to know about as they occur.

Risk categories can also be reclassified and changes to the impact of specific risks can be factored into existing underwriting models to proactively mitigate risk and advise customers of corrective actions to be taken.

So, do we think underwriting will be dead in 10 years? No, we don’t.

Yes, the role of the underwriter will change. The future of underwriting will take a blended approach of human and digital.

Judgement and skill combined with advanced Customer Lifecycle Intelligence.

To find out how you can improve underwriting efficiency, enrich submissions, improve decision making, assess and monitor risk, price more accurately, improve the customer experience, reduce costs, and gain a significant competitive advantage get in touch.

Managing underinsurance with confidence

FullCircl asked Aviva’s Jason Chambers how brokers can tackle underinsurance with greater confidence.

According to Aviva, up to 50% of UK businesses are underinsured, with 40% only covered by a 12-month indemnity period. These shocking new statistics paint a stark picture of the huge risk the insurance sector and the businesses it serves are facing right now. 

The ever-present threat of underinsurance

Underinsurance is one of the most prevalent and damaging issues impacting the insurance market in 2023. It must be tackled with confidence if we are to identify those customers most at risk, help them make informed decisions about how to tackle the crisis they are facing, and deliver better protection outcomes.

But how?

FullCircl’s Insurance Success Director Ashleigh Gwilliam held a fireside chat with Jason Chambers, Head of Underwriting Transformation at Aviva, to delve into how brokers can support customers at a time when underinsurance is an ever-present threat to their future success.  

Practical underinsurance mitigation strategies

Jason shared key findings from Aviva's YouGov report, highlighting the current state of underinsurance, its own response, and invaluable insight into how brokers can use data and technology in innovative ways to:

• Proactively identify vulnerable customers
• Build a full picture of risk – material changes across an entire organisation including buildings, operations, indexation, inflation, supply chain, machinery and plant exposures
• Personalise engagement with clear, regular, and timely dialogue
• Empower customers to make informed decisions
• Deliver greater certainty around outcomes

Watch now to find how brokers can elevate their expertise, get closer to customers, and tackle underinsurance in the most confident way possible.

Want to learn more about the rising risk of underinsurance?

Check out our new report to learn more about the widening underinsurance gap facing UK Plc, and how commercial lines insurance brokers can play a critical role in helping companies get the right cover to protect them against the deepening economic storm.

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Reflecting on BIBA 2023: Brokers want greater development and availability of InsurTech

The FullCircl team were thrilled to attend BIBA again this year. We were delighted by the sheer number of visitors to our stand, all of whom were keen to discuss the challenges they are facing - from winning more new business and retaining existing customers in a hard market, tackling underinsurance, and investing in future success whilst managing the impacts of a tough regulatory environment and the cost-of-living crisis. Likewise, the opportunity to hear from industry leading experts and make new connections is what the event is all about, and it certainly did not disappoint.

The standout headline for us was that attendees voted for greater development and availability of InsurTech to help with efficiency, evolving customer needs, and cost reduction in a poll during a session entitled ‘What’s Coming Up for Brokers’. This gained 25% of the vote, coming a close second to their top wish list item - a period of stability with no regulatory or legislative changes.

FullCircl is well positioned to assist brokers with both - but we’ll come back to that later.

A record-breaking success

It was fantastic to see the insurance community come together to ‘Rise to the Challenge’, as insurers, brokers, intermediaries, specialists, and service providers joined forces to debate the problems and solutions facing the industry as it looks to the future.

An exciting two days of networking, expert insights and challenging debate, this year’s event brought in record footfall with over 9,000 attendees. Summing up the event, Ashleigh Gwilliam, FullCircl’s Insurance Success Director commented:

“If you work in insurance, you must be at BIBA! Where else can you catch up with so many of your existing clients, prospects, and partners in two days. This year’s theme, Rise to the Challenge, is really defined by pan-industry collaboration, and a true sense that we are all in it together to deliver better results for customers. We are still feeling the effects of the pandemic, inflation, and the hard-market – with underinsurance still prevalent, it was great to have so many conversations about how brokers and underwriters can utilise data and insight to take proactive steps to protect and support their clients.”

Our key BIBA 2023 takeaways

So, what did we learn? Here are our top 3 key takeaways from the event.

1. Data will be vital in helping brokers deal with the vagueness of principles-based regulation. With the Consumer Duty set to raise standards and clarity around consumer protection (and consumer means all retail customers, including SMEs), data will play a key role in reducing the complexity, time and cost associated with fair value assessments. It will also be vital in terms of building a deeper understanding of the customer – what they need, why they need it – and helping measure, record, review, and improve across the entire customer lifecycle. As a fellow industry commentator recently pointed out “by streamlining the data acquisition process for brokers so that a 360-degree picture of an individual’s insurance background can be built instantly, customers can enjoy a smooth onboarding process, a better customer journey and overall experience”. We couldn’t agree more.
2. The relationship between insurers and brokers is more vital than ever – data can facilitate greater collaboration. It’s about harnessing technology to build an ecosystem of data-driven collaboration that will reduce complexity, boost efficiency and drive innovation. The more data, the more ideas, and the more opportunity to close the protection gap, tackle underinsurance, respond to emerging complex risks and exposures, and improve the customer experience. Leaders agreed that innovation and the implementation of technology is vital to the survival of the insurance sector and broker business. We agree! Greater access to Customer Lifecycle Intelligence allows brokers to make the best possible submissions to underwriters and armed with this better-quality intelligence underwriters can make more accurate assessments of risk and therefore provide better terms and prices to the broker’s clients. Better business, faster – brokers can rely on their underwriter relationships to insure their clients, and underwriters can rely on their broker relationships to present new opportunities for profitable growth in a hard market. Neither can thrive without the other, they must collaborate and innovate in unison.
3. The future of insurance service is going to be about finding the sweet spot between humans and technology. There is an urgent requirement to deliver greater customer experiences to improve the value proposition of the sector. Success drivers for brokers include customer focus, speed of response, knowledge, communication, and delivery, and all must be underpinned by strategic data-driven decision making. The challenge of course, is how to build the perfect hybrid solution. We believe a great personal experience has technology at its heart – that is the Customer Lifecycle Intelligence difference.

How is FullCircl helping the insurance sector ‘Rise to the Challenge’?

FullCircl is already helping 85+ insurance businesses, including 8 of the top 10 brokers to:

• Prospect with precision: Brokers can harness data on over 5 million companies in the UK and use powerful filters to narrow these down to a workable prospect list. In addition, the connected structured and unstructured insights provide new opportunities for brokers to engage and establish credibility through well-timed, highly relevant and differentiated outreach.
• Prepare better underwriting submissions: Brokers can leverage data-driven customer intelligence that ensures no knowledge gaps, and that the submission process is both aligned with customer needs and the requirements of tougher risk-averse underwriting conditions.
• Increase client retention: Brokers receive daily insights into changes in their client’s world, flagging potential issues and reasons to engage throughout the period of cover – e.g. changes in management; potential mergers and acquisitions; change of premises; relationship triggers; potential financial risks and market opportunities. 
• Cultivate existing book of business: Daily insights into the client’s world offer brokers the perfect way to trigger conversations about additional product lines. Upselling and cross-selling mean not only are policies per account more profitable, but a stronger sense of trust is fostered, establishing the broker as an advisor rather than simply a service provider.

We want to help you too.

FullCircl empowers your team with rich, contextualised company information on every business in the UK and Ireland. Information you can use for commercial insurance risk management purposes and to carry out deeper risk-based monitoring. With complete clarity on your market provided by sector specialism and vertical integration, you’ll always have the information - and the CLI tools - you need.

Get in touch with a member of our team today, to find out how we can work in partnership to ensure you ‘Rise to the Challenge’.

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