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Research Outline

Prepared for Egeria R. | Delivered May 20, 2020

KYC Case Studies

Goals

Locate 2-3 case studies that show how banks/financial institutions in the U.S. have implemented "Know Your Customer" (KYC) FinTech into their organization, and the cost implementations it has had for them. For each case study, we will identify who the financial institution was, what area of the banking industry they participate in (i.e. who their customers are), how they implemented/use KYC tech, and any metrics of success, struggle, or revenue gain/loss as a result of this tech.

Early Findings

Citibank

  •  Citibank currently uses "Know Your Customer" (KYC) software in order to identify and verify beneficial owners that are looking to open new accounts through Citi. As of May 2018, the bank is required to collect this information for individuals that own at least 25% of a business and want to open an account with Citibank, individual consumers, or persons working for a company on the C-suite level.
  • Additionally, Citibank is required to collect the birth date, residential/business address, and a government-issued ID number for every account holder in their institution. Some individuals may also have to provide a copy of their driver's license, passport, or other photo ID. 
  • Citibank currently has around 30,000 employees nationwide on their payroll that handle compliance content, including KYC software and regulations. On average, these individuals are paid an annual salary of $56,400. This amounts to a total of $1.47 billion per year.

General Cost Findings

  • In 2017, financial institutions that brought in more than $10 billion in revenue per year spent about $150 million on KYC-related procedures, which was an increase from 2016's average spend of $142 million.
  • For not complying to KYC regulations, banks in the U.S. have paid more than $300 billion in fines.