It is an absolute no-go to have any guidance on how long time an employee is allowed to spend on a given control within your Financial Crime Defence, e.g. a KYC file or a TM-, Fraud- or Sanctions investigation.
The appropriate time spent will always be the time needed to come to the right conclusion documented in the right quality.
However, it is still very important to measure how much time is spent in average on the different controls and thereby that the defence over time becomes more efficient (measured by an average time KPI) without compromising the effectiveness (measured by a quality KPI).
In some banks the KPI measured is the effective time used by the analyst/investigator on a control. While that is also interesting, the development in gross average time is the only one that can encompass the effects of all possible improvement initiatives.
The average gross time KPI is calculated on a monthly/quarterly frequency by assigning all the gross time of all the employees involved in each control, divided by the number of files/investigations finalised in the period. That specifically means that also time spent by 4-eye controls, team leads, MLRO’s etc. must be included in the gross time KPI.
The KPI should be possible to break down into subsegments, thereby making it possible to identify surprising facts that should be further investigated, e.g. if more time is spent on normal retail customers than private banking customers and more time on SME’s than on larger Corporates.
If a bank has not measured the average gross handling time before, I promise, it will come as a wakeup call on how many hours it takes in average to finalise one single control/investigation.
It is very important not to spend the time trying to explain why the value of the KPI is as high as it is, but instead asking the right questions – what drives our time spent and how can we reduce it without compromising on quality?
It might be that KYC analysts spend too much time on single transactions (see my advice #1), it might be that the staff turnover is too high and therefore too much time is spent on training new staff – or it might be something completely different – that is for you to identify and address.
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