Artesian Solutions, the UK Sales Intelligence vendor, has been teasing its Artesian Risk and Compliance Hub (ARCH) compliance service for over a year.  The new offering, now Generally Available, “enables relationship managers, underwriters and frontline teams within banks, insurance companies, and other financially regulated industries to quickly assess and better understand their corporate clients at the start of the customer journey and throughout the life of the customer.”

Financial services generally perform KYC / AML (Know Your Customer / Anti-Money Laundering) processing during onboarding, but ARCH moves initial processing to frontline staff at the top of the sales funnel before a client is signed.  This “distributed compliance,” helps expedite the process, sets client expectations when processing may take longer than normal, and allows relationship managers to avoid prospects that will have arduous compliance processing or which may not meet the institution’s “appetite.”  

ARCH flags risks which may require additional information from the client.  By flagging them at the outset, the RM can request the missing data before it delays onboarding.

ARCH performs event-driven reviews which begin before onboarding and continue through the life of the loan or policy.  Thus, KYC is no longer subject to periodic reviews but is performed dynamically as new information about the client is ingested by ARCH.  Instead of client reviews determined by the calendar, events can trigger full client reviews as needed.

ARCH supports commercial insurance policy writing “with a combination of data and sophisticated rules, bringing efficiency, consistency, and accuracy so that underwriters can focus on underwriting.  Decisions can be recorded whilst both justified in the future and used for decision analysis and pricing optimisation.”  Artesian’s fine-grained taxonomy and assisted machine learning help to identify potential underwriting risks “according to the predetermined definitions of an insurer.”

By moving compliance reviews to front-line workers, commercial insurers can perform a KYC check and risk evaluation prior to quoting a policy.  “One reason for using it is that they might want to look at what gets declared to them by the new customer compared to what they can see from ARCH,” said Artesian VP of Risk Solutions Matt Elsom.  “To do that they can have a look at some of the fraud-focused data sources and financial data.”

A January survey by Fenergo of global financial services executives found that poor onboarding negatively impacts client experience and reduces the lifetime value (LTV) of clients.  36% acknowledged losing customers due to onboarding issues and 84% tied the onboarding experience to reduced LTV.

Figure 2: “The Cost of Poor CX,” Fenergo, January 2019. N=250 global Financial Services executives (Source: Artesian Solutions)

Artesian noted that KYC compliance team workloads have “grown beyond all expectations” due to the availability of international ownership linkages and ultimate beneficial ownership data.  “The overall effect of this is an MLRO [Money Laundering Reporting Officer] and board being put under pressure to reduce onboarding delays whilst maintaining adherence to regulation – and the only effective solution has been to recruit more compliance analysts.  The cost associated with this approach has become unsustainable as the work queue continues to grow simply to maintain current levels of new business.”

According to Artesian, “ARCH is not only an innovative new technology, but a huge leap forward in the drive for ‘distributed compliance’ – the ability for central teams to distribute KYC and AML tasks to their frontline colleagues who are best placed to engage with the client and solve issues in the fastest, most productive way.  It places compliance and powerful risk data at the heart of the business – front of mind for every member of staff, informing every decision, instructing every interaction and shaping every relationship from pre-screening prospective new customers through to ongoing tracking and long-standing client development.”

The “configurable decision engine” monitors real-time credit risk and KYC data sets and applies bank or insurer policies to the compliance decisions.  Each client determines which data sources to ingest and “applies custom policies to that combined data in the form of multi-dimensional rules” which are screened and interpreted based upon institutional policies.  Flagged issues are delivered through a browser interface or loaded into other compliance systems via an API.

“We have the great privilege of serving 80% of the UK’s major banking institutions, providing powerful sales engagement insights to relationship managers.  We asked what we could do to make our software even more useful and the answer was ARCH. Almost two years of engineering and millions of pounds later we’re announcing ARCH’s general availability for customers.  We believe this puts Artesian in a unique position to be able to combine customer engagement capabilities together with credit and risk in one single application delivered through a browser or mobile device.”

We’ve built a strong team of specialists to extend our core competencies and have worked closely with our key partners at Experian, LexisNexis, and Refinitiv (Thompson Reuters) with more partnerships to come.  This allows our customers to select the data sources they already rely upon and trust and easily integrate them into ARCH”

Artesian Solutions CEO Andrew Yates

During a beta test with a top UK bank, ARCH decisioning was fully consistent with existing bank processing while flagging 14% more “critical risk” issues than current bank processes.  ARCH also reduced average case time from two hundred minutes to eight, “allowing relationship managers to know more, know sooner and save time – enabling them to focus on delivering a better customer experience.”

PwC recently added ARCH to its eleven-week incubator program Scale InsureTech which is “aimed at identifying and developing fast-growth technology companies in the insurance sector.”

Artesian financial services clients include RBS, Barclays, HSBC, Lloyds Bank, EY, and Marsh.

North American sales intelligence firms do not normally support client onboarding and risk assessment, but UK and European firms support these functions due to a richer set of registry data.  European vendors such as DueDil, Bureau van Dijk, and Artesian support sales, marketing, and regulatory compliance.