The Digital KYC Onboarding Challenge
Digital onboarding bottlenecks usually arise from the same underlying issues: siloed systems, manual checks, and repeated requests for the same information. These frictions directly affect client experience. In banking, 63% of customers abandon the digital onboarding process before completion, according to a 2020 Signicat report.
The challenge becomes even more acute when onboarding involves multiple service providers. In introducer-led or intermediary-driven models, the same client may be onboarded separately by advisers, trust and corporate service providers, and banks. Each party collects KYC data independently, leading to a frustrating and delayed process for all parties.
In this blog, you can learn how technology can address these structural challenges and enable faster, more efficient digital onboarding without compromising regulatory standards.
What is Networked KYC?
Networked KYC (nKYC) enables the secure, consent-based sharing of KYC data between multiple parties involved in the same client relationship.
Rather than relying on static data or rekeying information into new systems, nKYC allows verified KYC information, supporting documents, and audit history to be shared electronically between named service providers in a chain. Each party receives the data directly into its own onboarding workflow, where relevant fields can be pre-populated.
Crucially, this is not a centralised data utility. Networked KYC operates on a point-to-point model, with sharing limited to explicitly authorised recipients and governed by documented client consent.
Regulatory and Risk Considerations
Reusing or sharing KYC data does not remove regulatory responsibility. Each institution remains accountable for its own customer due diligence decisions, and regulators expect strong controls.
Global standards reinforce this. The Financial Action Task Force Recommendation 10 requires that any reused or shared identity data meets the standard of being reliable, independent, and fully auditable. Firms must be able to demonstrate where data originated, how it was obtained, and how it has been maintained.
Data protection frameworks such as GDPR add further requirements. Where KYC data is shared, organisations must be able to evidence lawful processing, explicit consent, data minimisation, and appropriate safeguards. Cross-border data flows introduce additional complexity, as verification standards and regulatory expectations can vary by jurisdiction.
Networked KYC addresses these considerations by design. Shared data is accompanied by a full audit trail showing who provided the information, when it was captured, and how it has been handled. Risk decisions are not transferred. Each receiving party applies its own risk model and controls, preserving regulatory accountability.
Webinar: Avoiding KYC Bottlenecks with Networked KYC
Choosing a Trusted Provider for nKYC
When evaluating technology providers, organisations should consider whether the solution:
- Supports selective field-level data sharing rather than full document transfer
- Preserves full audit trails showing data origin, capture method, and change history
- Provides access to high-quality PEP, adverse media, and sanctions databases to support effective screening within shared onboarding processes
- Ensures risk decisions and scoring remain with each individual institution
- Integrates smoothly with existing digital onboarding and customer lifecycle workflows
- Aligns with FATF standards for reliable, independent, and auditable KYC data
- Supports GDPR requirements, including lawful processing, data minimisation, and consent management
- Handles cross-border onboarding and maps data reuse to local AML regulations
- Offers configurable workflows to reflect different client types and risk appetites
- Provides strong information security, resilience, and access controls suitable for sensitive KYC data
Conclusion
nKYC represents a shift in how digital onboarding can work in multi-party environments. By enabling secure, consented sharing of KYC information between trusted parties, it removes duplication at the source and allows onboarding processes that once could take months to be completed in days.
For any organisation that collaborates with introducers or intermediaries to gather KYC data, Networked KYC offers a way to improve speed, efficiency, and client experience while maintaining regulatory assurance.
Book a demo with KYC360 today, to discuss how we can help your compliance teams implement nKYC for smoother, frictionless digital KYC onboarding.