Biometrics Reduce Compliance Costs
According to a new research from Mitek and Consult Hyperion, the cost of bank KYC compliance among top-tier banks in Europe has risen to around €50m per annum. Rising regulator fines, customer abandonment, lower trust, among other indirect costs of poor KYC practices, could cost banks another €150m over the next five years.
“It’s no longer good enough for banks to simply accept the costs associated with inefficient processes – the consequences are now much more serious,” said Steve Pannifer, author of The Cost of Compliance and How to Reduce It and Chief Operating Officer at Consult Hyperion. “The biggest change in the past two years has been new EU rules around KYC related compliance. This has led to many more punitive fines for banks who fail to comply – and the size of the fines has grown in tandem. We’ve seen the Financial Conduct recently issue fines to several major banks, amounting to £176 million. Then, even that fine was dwarfed by the €775 million fine handed to a single bank by Dutch authorities.”
Also interesting is the Indian Government’s Steering Committee on FinTech moving to include video identification to extend biometric options for customer identification and verification.