Data plays a central role in banking and financial activities and will continue to do so in the future.
Information related to client knowledge, whether individuals or legal entities, is undeniably strategic.
That is why the ecosystem, consisting of regulators, banks, and providers, is exploring ways to optimize data collection processes and enhance partnerships with global KYC initiatives like ‘Utilities Services’ and e-KYC.
The establishment of data governance, robust internal processes, and specific tools to facilitate a unified view of third-party data used in client onboarding and KYC reviews necessitates the development of an industrial and centralized approach to digital data processing.
Currently, data provider offerings are fragmented, requiring banks to engage multiple solutions to meet regulatory requirements and business needs. This fragmented approach may result in increased processing costs for banks.
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Merger activity among data providers and utilities has commenced to expand services across the value chain and cater to a broader clientele. Data aggregators, offering tech flexibility through APIs, have emerged as strong competitors to traditional utilities, enabling banks to streamline data provider interactions and promote digital e-KYC processes.
Several banks have formed partnerships or made investments in leading external data and document providers while maintaining internal expertise. However, there is currently no universally approved third-party data sharing model endorsed by markets, regulators, and banks.
Some banks are shifting towards mix-sourcing strategies through strategic partnerships with data providers in Europe, the US, and Asia, eschewing the intermediary role. The ongoing consolidation among market providers is expected to lead to geographical conglomerates.
While progress has been made in consolidating data value chains and expanding geographical coverage, challenges remain in standardizing and ensuring the reliability of shared data. This presents an opportunity for new players in e-KYC aggregator utilities to offer superior business and technical solutions.
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This article was first published on March 30, 2021
The post How e-KYC aggregators are the future players in the data supplier market appeared first on e27.