Utilising compliance data assets to generate new business opportunities

By Alain Bozzi, Societe Generale Head of Group Compliance - 2016

“Data is becoming a very important way for banks to tailor their services and provide the most appropriate products and solutions to their customer base – be they individuals or corporates. At the same time, data can protect banks from illegal customer activities by providing a basis on which to judge customers’ behaviours and whether something inconsistent with a customer profile has occurred.”


Financial institutions must collect a great variety of data and documentation to address Customer Due Diligence (CDD), Know Your Customer (KYC) and related compliance requirements. Can banks leverage this information to customise and personalise banking products and services? What opportunities exist, and how can banks make the most of them? Is caution advised, and what pitfalls, if any, should be avoided?

  • In the past, know your customer (KYC) was all about identifying an individual customer or a corporate entity. Banks would collect information, such as name and address for individual customers and for corporates additional information such as board members and countries in which the company did business. This information would indicate that banks knew who the person or company was and the business they were doing. In order to deliver the right services to customers, it is important for banks to have clear knowledge of who their customers are and the business they are doing. The information gathered during KYC processes helped with that.
  • Today KYC obligations have gone far beyond the gathering of information on customers. Regulatory initiatives such as the Markets in Financial Instruments Regulation reinforce the requirement regulators make of banks to collect more information on their customers. Generally, banks are required to collect enough customer information in order to ensure that when an action occurs on an account it is consistent with the profile they have of the account holder. The more a bank knows about a customer, the more it will know about which products and actions are consistent with that customer’s needs. Moreover, the collection of customer information across different jurisdictions helps banks to protect themselves against the actions of customers who may be engaging in unethical acts.
  • There are benefits banks can derive from their obligations to comply with KYC rules. Customer data is becoming more important as banks move away from physical, branch-based interactions towards the digital delivery of services and products. The more information we can gather on customers, the more tailored our products can be to their needs. For example, if we notice that a particular customer, when travelling, withdraws cash from an ATM every day, we can possibly propose a less costly solution to their cash needs. By gathering more detailed information, we can provide that to the bank’s front office, which is developing solutions for customers. New products can be developed for customers that are also lower-risk for the bank.