Fenergo's Remote Account Opening Solution: Expediting Client Onboarding During COVID-19 and Beyond

The COVID-19 pandemic has severely disrupted public health and economic health of societies across the world. In response, local, regional, and national authorities have proposed a slew of measures to contain the damages caused by the pandemic. In the US, the Coronavirus Aid, Relief, and Economic Security (CARES) Act is one such stimulus program that seeks to address the economic fallouts from the crisis. The Paycheck Protection Program (PPP), a component of the CARES Act, is a loan disbursement program intended to provide a direct incentive for small businesses to keep their workers on the payroll.

Implementing PPP can be operationally challenging for banks because the loans are disbursed through lenders who must comply with the stringent Banking Secrecy Act (BSA) and its requirements for know your customer (KYC) and anti-money laundering (AML) checks. While it is easier to serve a bank’s existing business customers and help them receive the program’s disbursements, doing so for new customers is challenging because KYC onboarding activities at most banks have traditionally been highly manual, paper based, and therefore lengthy and costly.

Fenergo, a provider of client onboarding and lifecycle management technology solutions, has launched a new cloud-based offering — Remote Account Opening (RAO) — that is intended to overcome these challenges and enable banks to onboard new business accounts remotely and rapidly. This offering leverages its established technology solution and expertise, and extends its system to accommodate the KYC, AML, and screening needs of the PPP loan application process. The solution can be used by new customer banks that were not previously using Fenergo solutions, and by Fenergo’s existing customers, which may add on this new capability.

Beyond the US, authorities across the world are rolling out similar stimulus programs and emergency funding packages. Furthermore, the need for remote onboarding and transactions is likely to persist well into the future because Celent expects that, prompted by COVID-19, many banks will re-evaluate their branch banking strategies and operational arrangements, close some branches, and limit services offered at some branches. It is expected that digital remote onboarding solutions such as RAO will play an important role in operationalizing such strategies. In this, banks will need to strike the right balance between ease of doing business and fulfilling their compliance obligations. Therefore, such digital onboarding solutions need to be complemented by strong compliance controls and governance framework to prevent identity theft, fraud, and other types of financial crime.