Banks Shift KYC Focus From Documents to Better Data

Banks have spent years digitizing know-your-customer checks, yet onboarding still often depends on passports, business licenses and proof-of-address files that must be uploaded and reviewed. The resulting duplication, inconsistent records and manual intervention slow account opening and raise compliance costs. The strategic shift is toward verified, current and reusable identity data that can support anti-money laundering controls, sharper risk assessment and a smoother customer experience without expanding document collection.

The latest analysis argues that institutions should integrate internal and external, public and private sources, prioritize high-value fields such as beneficial ownership, legal entity identifiers and verified addresses, and automate monitoring toward perpetual KYC. Encompass Corporation said on Nov. 14, 2024, that Tier 1 banks spend an average 4.5 times more on manual customer due diligence and KYC than on technology solutions. The report did not identify a bank, investment amount or implementation deadline, framing the development as an industry direction rather than a disclosed rollout.