Reported by PwC Canada

Introduction

A global North American financial institution faced mounting challenges in its Know-Your-Customer (KYC) operations, including identity verification, customer due diligence, and onboarding. Pressured to modernize and streamline its processes, the organization engaged a consulting team to help reimagine its approach. Through collaborative discussions, the team shared industry-leading practices and piloted a hybrid delivery model to enhance operations. The success of these initiatives led to a broader managed services agreement, transitioning the financial institution’s KYC operations from traditional outsourcing to a more innovative and effective model.

Challenge

The organization’s legacy KYC model was plagued by inefficiencies, such as poor work quality, slow productivity, and lengthy onboarding timelines. These issues negatively impacted customer experiences and burdened leadership with operational oversight, detracting from their strategic focus. Recognizing the need for a complete overhaul, new leadership set clear goals: improve process efficiency, enhance quality, reduce costs, and deliver a better customer experience. The consulting team responded by drawing on global expertise and tailoring solutions to meet the institution’s specific challenges, paving the way for transformative change.

Approach

To address the issues, the consulting team conducted a comprehensive discovery review, analyzing the institution’s existing KYC processes and identifying opportunities for improvement across people, processes, and technology. They recommended a hybrid delivery model combining local and offshore resources, supported by a multidisciplinary advisory team. A pilot project demonstrated the effectiveness of this approach, delivering higher-quality results, faster upskilling, and improved throughput compared to the organization’s previous provider. The pilot’s success led to a multiyear managed services agreement, transitioning most KYC functions to the consulting team’s hybrid model.

Impact

The transformation introduced a 24×5 delivery model, ensuring continuous progress on KYC files and meeting global operational demands efficiently. The streamlined model allowed leadership to work directly with trusted onshore project teams while benefiting from the global resources available through the offshore center. The revamped approach reduced operating costs by 20%, enabling the organization to reinvest in further transformation activities. Additionally, the institution improved client and staff experiences while establishing a robust framework for optimizing other functions.

Key Success Factors

Several factors drove the project’s success. A dynamic hybrid delivery model provided scalable and efficient solutions, while dedicated operations and advisory teams ensured high-quality, sustainable KYC services. A human-led, tech-powered approach closed capability gaps and delivered ongoing improvements. Finally, a focus on measurable outcomes and milestones helped the organization achieve its objectives, creating long-term efficiencies and value. These elements combined to transform the institution’s KYC operations, positioning it for continued growth and adaptability.

Read full report: https://www.pwc.com/ca/en/services/consulting/financial-crime/managed-services/transforming-major-fIs-kyc-case-study.html