All about customer remediation: from
risk reduction to value creation

Pieter Hallewas tells how financial institutions with customer remediation comply with legal regulations and foster growth.

Previously we explained how KYC platforms help in countering money laundering and make the difference in anti-money laundering efforts. Yet there is another crucial process in the financial world that remains underexposed: customer remediation, also known as reboarding.

In this blog, Pieter Hallewas, director of Invenna, guides you through this process. He turns these complex matters into understandable concepts and explains how financial institutions with customer remediation not only comply with legal regulations but also stimulate growth.

The customer remediation process
Within the financial world, the terms customer remediation and reboarding have become impossible to ignore. This process monitors the reevaluation of specific customers and customer groups whose data are incomplete because the lack of data means that you don’t meet the strict laws and regulations.

Even though most new customers meet the applicable rules, it increasingly occurs that customer groups show incomplete documentation. Take, for example, missing contact details or identification details like a copy of a passport. Customer remediation improves the quality of the previous onboarding process, which enables financial institutions to meet all requirements. This is particularly important because of the stricter Know-Your-Customer (KYC) regulations.

Essentially, customer remediation is about facing and solving problems to enforce positive changes. It’s a proactive measure to improve and recover situations.

The remediation of customers
The process of remediating a customer group is quite easy to summarize: you contact customers and ask them to provide the missing information. If customers still fail to share the necessary information, it inevitably means ending their services and “offboarding” them. This process must be followed and documented according to set rules.

When offboarding customers, you need to prove that you have made multiple attempts to contact and communicate with them. A thought-out communication process and using the right channels are crucial here. However, the registration of the attempts and results (audit trail), the approach of customer issues (remediation) and ultimately ending the services (offboarding) altogether form a complex whole. In this context, data, technology, insights, overview, and documentation play an essential role in success.

Automation of the customer remediation process
The customer remediation process is mostly fit for automation. You save costs by focusing on the quality of your data – in other words, the data quality and the online accessibility. After all, solving customer issues is more economical than traditional methods such as mail and phone.

Moreover, it’s important to take customer segmentation into account. This can result in serious advantages. Remediation of a customer group above 70 years is more difficult and more expensive than remediating the millennial generation.

The right approach to customer remediation
In determining the right approach to customer remediation it’s also vital to consider whether customer groups that require remediation also need to be integrated into the regular (KYC) processes. Meticulously analyze this before you decide and answer questions such as:

  • Is the current software suitable for this purpose?
  • Does the inclusion of remediation customer groups affect the onboarding process of new customers?
  • Do the employees involved understand the differences between onboarding and reboarding?
  • Does the audit trail in the current system meet the requirements for remediation?

In case you’re looking for ways to improve customer remediation and reboarding processes, there’s an availability of independent software solutions and expertise. Especially when specific customer segments require remediation or reboarding, these options are worth researching. Next to offering a quick solution, they are often more efficient, cost-saving, and more easily adjustable to process requirements than existing solutions for new customers. It’s important to emphasize that remediation demands a specific form of expertise, which differs from the relatively simple onboarding process for new customers.

Successful customer remediation goes beyond mere conformity
It speaks for itself that successful remediation is essential in complying with laws and regulations and minimizing the risk of getting fined. But let’s not forget that a successful customer remediation process also provides opportunities to (re)activate and engage customers. Through renewed customer contact, you can build a stronger relationship and favorable brand association. This way, the customer group that poses a challenge today, forms a new source of growth tomorrow.

When you approach customer remediation in this manner, you don’t only see risk reduction and the associated costs but especially the positive opportunities for creating value and achieving new successes.