Continuous risk-based due diligence delivers great benefit


The trouble is like most sick patients there’s a tendency to research a solution to a problem – and then just opt for the easiest route to resolve the symptoms of distress to get through another day.

This typifies what often happens amongst organisations when assessing the costs, or implications, of trying to transform their approach to risk. But this approach is at best short-sighted, and in all likelihood likely to lead to far greater costs or penalties in the future.

Most executives in charge of the risk function of their organisations will be acutely aware of the increasing
challenge to source and hold onto experienced key talent in areas of AML and financial crime.

But more than just the issue of recruitment the use of people – with the emphasis on manual processes – is that they are slower than technology, more open to error or inconsistencies, and as requirements rapidly escalate teams of people can become increasingly bogged down with ever growing task queues.

Much is talked about the potential of technology to alleviate the growing burden of cost and time affecting companies dealing with these issues. Today most are still opting to throw people at the problem. One of the things that many organisations need to do to address this is impasse is understand where to start while trying to maintain an effective ‘live’ solution to the issues they are encountering.

Companies need to start to think more broadly about changing the way they can assess and classify how they deal with different levels of customer risk, to enable them to use different approaches or treatment strategies depending upon a range of criteria.


Automated customer monitoring to reduce risk


avoid-fines Avoid fines and prosecutions from non-compliance identify-risks Identify risks quicker
kyc-kyb Ensure effective KYC and KYB good-customer-experience Improve experience for good customers
reduce-cost Reduce costs and increase efficiencies    




Synectics has been working with customer due diligence consultant Mark Scott, to provide its finance and insurance clients with a more automated approach to deal with the on-going monitoring of customer risk.

This will help them transform the way that KYC remediation, ongoing KYC monitoring and enhanced due diligence can be achieved.

Mark reflects on his own experiences, and the work he has been doing with Synectics to help organisations address the issues that customer due diligence and screening present.

“Due to a need to evaluate AML compliance and satisfy new regulatory requirement I was hired by a large retail bank to undertake a remediation programme to assess the risk levels associated with customer portfolios."

"Initially, the plan was to manually remediate high risk customers before setting about the remainder of the portfolio. Approaching the project in this way inevitably meant that the resource and budget required to deliver this was substantial – and the time frame to address it ran into years."

"What was also apparent is the inefficiency of this approach by contacting all customers for information that they had already provided, and in fact, could be sourced and validated externally."

"To compound matters the customer risk assessment methodology in this instance was also new – so the overall risk distribution and number of high risk cases wouldn’t be known for some time. The approach therefore wouldn’t validate the effectiveness of the customer risk assessment model and possible calibration required."

"On this basis, I proposed an automated approach to tackling both the initial remediation activity and on-going monitoring. The methodology was simple; match internal data against external data and risk rate every single customer in bulk. This was achieved by using a small number of data sets to begin with, enough to ensure the customer risk assessment could be undertaken and validated."

"This allowed an up to date risk assessment to be undertaken each and every month – without negatively impacting the customer. This approach also removes the need for hundreds of people to manually request or process information."

"Upon the first assessment, an initial risk profile was achieved on the entire customer portfolio, which provided valuable insight into the volume and nature of high risk customers. These early evaluations allowed the customer risk assessment to be amended and calibrated based on a known risk distribution, and high risk customer portfolios could be addressed as a priority. This approach allowed monitoring to occur to identify the volume of cases that change from standard risk to high risk, via an initial assessment and then on a month to month basis.

"Overtime risk models were enhanced with additional data feeds and calibrated risk models to improve the breadth and range of risk analysis undertaken. This allowed an up to date risk assessment to be undertaken each and every month – without negatively impacting the customer. This approach also removes the need for hundreds of people to manually request or process information."


"I am now working with Synectics Solutions and its clients to help scope and deploy automated KYC remediation programmes and solutions. To this end, Synectics is now able to provide organisations with a holistic view of their customers, which is automatically generated and allows high risk cases to be worked as they occur."

"Synectics is working with a number of other clients, in the finance and insurance sectors, to help them transform the way they can:

  • Successfully monitor and remediate their customers;
  • Comply with the latest regulation;
  • Drastically reduce the time and cost of achieving effective remediation;
  • Avoid the negative impact of continually asking customers for existing

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