Compliance demands have evolved, and so must client lifecycle management. As regulations tighten, customer profiles diversify and operational costs rise, applying a ‘one-size-fits-all’ approach to onboarding and due diligence might no longer viable.
Risk-based CLM has become a gold standard, and with KYC Portal CLM, firms can scale this approach effectively. The RegTech, recently outlined how it can help.
Financial institutions, corporate service providers and FinTech companies face a growing paradox: the need to speed up onboarding while complying with increasingly stringent regulations. Historically, many firms have used a uniform onboarding process for all clients, regardless of their risk profile. This method is inefficient and potentially dangerous,KYC Portal explained.
Applying a fixed, uniform CLM strategy can overwhelm low-risk clients with excessive documentation requirements while delaying high-risk onboarding due to a lack of escalation workflows. It also drives up compliance costs and limits scalability while falling short of regulatory expectations for risk-sensitive due diligence.
A risk-based approach offers a smarter, faster and safer alternative to client lifecycle management, it said. It adjusts the depth, frequency and type of due diligence according to each client’s risk profile. This approach aligns with the guidance from regulators such as FATF, FCA, EBA and MAS, which emphasise proportionate risk management in KYC practices.
KYC Portal CLM helps firms implement a risk-based strategy through high configurability, automation and real-time visibility across client portfolios. It features a dynamic risk rating engine, allowing firms to create bespoke risk models based on jurisdiction, sector, UBO structures, PEP exposure, ESG factors and other parameters.
The platform also enables workflow customisation by risk tier, activating specific document requirements, approvals and review frequencies based on a client’s risk classification.
With live dashboards and real-time risk views, firms gain instant visibility over their client portfolio’s risk exposure. KYC Portal CLM also supports continuous risk monitoring through perpetual KYC, moving beyond point-in-time checks to automated alerts triggered by client data changes, media hits or new risk factors, reducing exposure as soon as risk arises.
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