Founded in 2011, London-headquartered Encompass enables fast, accurate identity validation and verification of corporate customers, and a gold standard approach to Know Your Customer (KYC). Now in its second decade, how are the firm’s mission and goals evolving?
As we begin a new year, Alex Ford, chief revenue officer and president of North America for Encompass, reflects on 2024 as a winning year for the business.
She said, “We’ve seen the industry mature in terms of understanding the place for corporate digital identity in their digital transformation initiatives and operating models. We’re seeing that the institutional investment and wholesale capital market part of global banks that we partner with have been really receptive and are adopting CDI in their plans.”
Alongside this, awards and acquisitions have been high on the agenda. The company has received a number of industry acknowledgements and recognitions, with a key one noted by Ford being recently the RegTech award for Best Client Onboarding Solution.
However, acquisitions for Encompass have highlighted a key development this year. Earlier this year, Encompass acquired two significant entities from ING – CoorpID and Blacksmith KYC.
Ford explained, “We acquired (CoorpID) because we developed exciting technology to help banks retrieve everything that is available in the public domain about their corporate and institutional clients for KYC purposes, but there was still always that piece of the puzzle which is information that will only ever be shared privately between the client and the.
“CoorpID is a solution that solves the client outreach challenge uniquely from both a bank and end-customer perspective. Banks reduce friction in client outreach and can focus on driving client value. Companies that leverage CoorpID transform the way in which they share and update information across all of their banking because the platform allows data and documents to be shared with multiple providers.” she added.
The role of CDI
The role of a corporate digital identity is to improve the corporate and institutional client experience by enabling retail banking-like digital journeys. Digital identity verification for individuals has eradicated unnecessary friction from KYC and onboarding and we know that CDI will do the same for companies.
“CDI is changing the possibilities in what can be delivered in terms of client experience and the end-to-end journey that a bank can offer or that a bank can operationalise,” stated Ford.
She went on to highlight that when considering the retail banking area, the industry has transformed, with the norm now being a fully digital onboarding experience. as users are able to take a selfie, upload their passport and open an account all in one day.
“However, for companies, onboarding still takes 60 to 90 days routinely, and is still very manual,” exclaimed Ford. “What we see as a North Star is going on that same transformation journey – can you digitise more and more of the corporate client experience?”
Critically, manual processes do not scale quickly or easily making automation a top priority for banks.
Ford stated, “Processes that sit behind KYC have always been manual – email attachments, copying and pasting information into core systems – all of this manual activity introduces time delays, security risks and the potential for human error.”
The Encompass CRO explained that banks have spent hundreds of millions on Customer Lifecycle Management platforms but the KYC challenge still exists. “We’ve spent all this money putting the CLM in placebut are still at the mercy of a manual KYC process. This is why we really see CDI as the next wave of truly automating the end-to-end onboarding process.”
Roadblocks and transformation potential
While the CDI technology has huge potential, are there any chief roadblocks that stand in the way of the best implementation?
Ford said, “I think the bank needs to be resourced in the sense of a project team being needed, you need to be mature and understand that you need to have policies and procedures already defined so that you know what it is that you’re looking to automate, and you have to be open to optimising the process given that it is now automated – there is not point adopting the same old process without utilising the benefits of automation while you’re deploying it,”
Whilst not technically a roadblock, Ford outlined that in order to really harness the benefits of this technology, firms need to be prepared to see this as change management and resource it as such.
How can CDI, long-term, revolutionise financial services? In this spot, Ford emphasised that the technology can unlock digital operating models that haven’t been possible before.
She stated, “The knowledge and technology around CDI will evolve at pace to reimagine data handling processes. Straight-through-processing can become a reality and I think that totally changes what is possible in terms of expectations around client onboarding and the customer experience.”
Important market trends
When it comes to the discussion around key industry trends in RegTech, Ford believes one of the most undeniable trends in the industry right now is AI.
“A big trend we see is banks looking to harness and leverage more value from the KYC investments they’re making, or the CDO investments they’re making,” she said. “They don’t want these processes to happen in isolation and stay in the draw – they want to take the work that’s being done to satisfy that regulatory requirement and harness that information for other benefits, such as the client experience.
Ford also remarked that in tandem with AI is a trend around data hygiene and lineage. “It’s important to be able to prove that you have sourced data used for client decisions from an approved place.Trust and authority is really key,” she said.
Likewise, the area of AI-based fraud is becoming a key concern for many in the financial industry.
Ford remarked, “One of the concerning trends with AI-based fraud is how it’s becoming increasingly sophisticated, and the forms of technology that are available to construct deep fakes and do this at scale through GenAI technologies. It’s both scale and sophistication.
According to Ford, something that is very important in that context is being able to verify identity. “The typical stories we hear are the consumer scenario, but we need to make sure that companies are really who they say they are, and make sure we’ve understood who we’re doing business with.
“So being able to rapidly access authoritative sources that give you confidence of who you’re really doing business with is important. I think in the AI based-fraud context, rapid identification of corporate entities from verified and trustworthy sources is really important,” she stated.
Future plans
As Encompass looks towards 2025, one of the big areas of action for the company will centre around bringing together all of the capabilities the firm has developed over the past decade.
Ford explained, “This includes our acquisitions and is really about bringing that to market in a way that our clients can make use of CDI and also leverage that alongside their broader technology and CLM initiatives to adopt automation in the bank.”
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