INSIGHT: The KYC revolution you can’t afford to miss – Why traditional compliance is over

IN Capgemini’s recent whitepaper, “Reimagining KYC: From legacy friction to the pKYC triad,” one statistic stood out to readers: financial firms using perpetual KYC (pKYC) frameworks are cutting 70–90% of their periodic review workloads.

For organizations dealing with large backlogs, that might sound like an impossible dream. But if you’re still gathering information manually, the truth is this: your competitors are already building systems that don’t need to ask the same question twice.

The periodic review trap

Traditional KYC still assumes that customer risk changes on predictable annual or biannual cycles. In reality, risk‑relevant information is shifting all the time – sanctions updates roll in throughout the day, new external data points appear without warning, and customers’ activity is constantly changing. Yet most institutions still assess risk as if we’re living in the 90s, conducting time-consuming, manual reviews based on arbitrary calendar dates rather than actual risk signals.

The cost goes beyond the billions spent on KYC each year. With long onboarding turnaround times, analysts consumed by data collection instead of risk assessment, and regulatory findings that trigger costly remediation cycles, legacy KYC has become a structural bottleneck: one that can’t keep pace with regulatory expectations, the scale of financial crime, or customer demands for digital-first experiences.

The pKYC triad

Plenty of institutions recognize that they need to evolve – enter a new screening tool or automatic document capture – then wonder why nothing fundamentally changes. This is where most transformation efforts fail. Capgemini’s recent whitepaper introduces a genuinely innovative path forward: the pKYC triad.

Think of it as three elements that flow in a constant, self-perpetuating loop:

• Data modernization creates a single source of truth: one customer profile that doesn’t contradict itself across systems. 
• Intelligent automation turns risk signals into immediate, consistent actions without email chains or manual routing. 
• Intelligent analytics (including Gen AI) pre-assembles context – so analysts spend 80% of their time interpreting risk, not hunting for information.

Here’s the insight most organizations miss: these capabilities aren’t something you can just implement in isolation. They only work when in perfect synergy. Clean data enables reliable automation. Automation creates structured decision points where AI adds value. AI identifies new data needs and refines workflows. Only upgrade one gear, and the machine is still stuck. Set all three in motion together, and the whole system finally runs the way it was meant to.

Early adopters are already living in this future, reducing false positives by up to 40%, cutting onboarding by 40–60%, and watching case backlogs shrink by 70%.

Regulators are raising the bar

Meanwhile, regulators around the world are challenging static models. The EU’s new Anti-Money Laundering (AML) Regulation takes effect in 2027. Supervisors have been increasingly clear that static, time‑bound KYC models are no longer enough. AML’s scope has expanded to include sanction evasion, Environmental, Social, and Governance (ESG) related risk, corruption, environmental crime, and emerging typologies driven in part by the misuse of AI tools.

The message is clear: if you’re only checking customer risk when the calendar tells you to, you’re no longer compliant. You’re just hoping nothing changes between reviews, and regulators know that’s not risk management. It’s gambling.

Why this matters right now

The window for controlled transformation is closing. Institutions that move deliberately toward pKYC today will define industry standards and shape regulatory dialogue. They’ll gain proactive operational advantages while competitors pour resources into reactive corrections. Those who sleep on this vital opportunity face a host of risks, from rising costs and widening operational gaps, to frustrated customers and higher regulatory pressure.

If you’re exploring how to take the first steps, Capgemini’s latest whitepaper outlines the priorities, governance frameworks, and measures that can guide the journey.

Perpetual KYC is on its way to becoming the industry standard. The real question is whether your institution will lead the transformation – or be left trying to catch up.