Management consultants: your competitors are already adopting data-driven solutions to add greater value for clients. Are you lagging behind?
Having worked with all Big 4 firms and a plethora of smaller challengers, in this blog post, we outline 5 ways company data can help professional services firms bolster and differentiate their service offerings – as well as how internal shared service functions stand to benefit from this critical data too.
Service offerings of a firm
1) Powering managed services for risk management
Many firms provide managed services to help drive efficiencies in their clients’ risk management programmes. With these services, their clients outsource the execution of day-to-day risk management activities or remediation programmes. Instead of hiring internally, these services bring to bear efficiencies of scale, especially when conducting highly repeatable processes – such as Know Your Customer or onboarding checks and can support a range of compliance requirements from due diligence to supply chain management.
Company data plays a vital role in helping professional services firms deliver these managed services. Not only is the information crucial for the identification and verification stage of KYC, but the technology to enable accessing the data at scale helps firms to power tech solutions that turn a highly manual and often inefficient process into one that is increasingly automated and data-driven.
Importantly, these efficiencies are passed on to clients.
These services also provide perpetual KYC services where instead of periodic KYC reviews conducted in cycles based on the customers risk rating – pKYC takes data continuously to drive whether a re-review is required. Changes in company status or the directors can therefore be a trigger for reassessment, as well as adverse media and changes in products or transactions. Outsourcing these services mitigates the challenge that many clients face in terms of the internal data transformation needed to develop this in-house.
2) Enabling business and corporate intelligence
Professional services firms help their clients to understand in-depth information about their customers, prospects or other third parties, which can to inform important activities such as:
- Mergers and acquisitions – helping a company to understand more about a target they want to acquire
- Forensic investigations – looking into particular issues such as the individuals and companies used to commit financial crimes and other criminal activity, or to understanding the parties involved in a dispute
- Tracing assets or the source of wealth of a third party
For all these examples and more, company data is essential. It helps firms to piece together what has happened, the companies, individuals and wider network for those involved over time – so their clients can make more informed decisions.
3) Supporting financial crime programmes
Professional services firms help companies build and strengthen their financial crime compliance programmes through:
- Designing third-party risk management and customer risk assessments
- Implementing data-driven approaches for both proactive and reactive financial crime investigations
- Deploying technology and data to help clients investigate complex cross-border financial crime
Identifying red flags is difficult because bad actors conceal criminal activity behind increasingly complex layers of corporate opacity – such as shell companies. Company data can help uncover risk across the lifecycle of a company’s clients by providing information about the client’s entities but also the foundational ‘dots’ of companies and their officers and addresses of other potential relations, providing a wider view of potential risk and uncovering previously unknown relationships.
These services also look to drive within these clients the same technology driven approaches as we discussed about managed services – from automation and AI to the holy grail of pKYC.
OpenCorporates’ data, for example, is used to power knowledge graphs and link analytics solutions which expose possible risks and instances of financial crime as well as identifying changes in company data to highlight changing risks.
Quantexa is a great example of a knowledge graph based solution powered by OpenCorporates data which helps its users uncover risk hidden in corporate networks they wouldn’t otherwise be able to find.
4) Leveraging data and analytics
Virtually all corporations and financial services firms know that data can help them identify opportunities and efficiencies. But, for large firms, this is easier said than done as they are usually trying to manage a plethora (sometimes hundreds!) of systems, each with its own inconsistent references to companies that are difficult to reconcile.
Legal entity data is a key ingredient in solving this by acting as a reference set for all the companies that exist. Firms leverage the data to carry out entity resolution – unifying or cleaning up their data to help solve master data management, data analytics or other data related challenges.
5) Helping government agencies uncover fraud
Government agencies often call on professional services firms to help them reduce waste or fight fraud. Nowhere has this been more the case than with recent government efforts to uncover fraudulent claims to Covid business relief schemes.
Foundational information about companies has proven critical to these efforts, as key details about companies that have made claims to such schemes have been instrumental in identifying those that are potentially fraudulent.
Internal functions of a firm
Company data can also play a key role in the internal workings of a professional services firm.
Flagging conflicts of interest
Professional services firms are comprised of teams offering a wide range of services to clients around the world. For some services like audit however, a firm needs to remain independent – and so it may not be able to provide other services to the same company at the same time.
But the complexity of the corporate world makes it difficult for a company to flag that the firm is already working for the same client. For example, the company might be recorded under slightly different names in each team’s systems.
Using data that illustrates all the legal entities that make up bigger companies, it becomes easier to identify potential conflicts and to proactively ensure the right entities are added to systems with corresponding company identifiers.
Developing internal KYC centres of excellence
As firms often have hundreds of clients based all around the world, they can set up their own global centres of excellence which allow users across the company to pool resources on the crucial task of KYC and onboarding.
Much like how the data can aid service offerings for KYC, company data is the foundation for these processes as it allows the centre of excellence to accurately identify potential customers and undertake onboarding and review processes.
Fuelling an internal shared service for data-driven technologies
Similarly, some firms have set up a central shared service which helps various functions to leverage the power of AI and machine learning to generate insights and power their service offerings. Units of the company in different regions find this useful because it saves them all from having to set up their own (costly) individual services. AI and ML technologies are only as effective as the data powering them, and high-quality company data can drive better data analytics in all kinds of areas.
You may also be interested in…
- Case studies
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Read our latest case studies >
- How transparent company data helps government agencies
Government agencies increasingly use data and technology to help tackle financial crime and promote a healthy business environment.
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