Why Manual KYC Processes Won’t Scale Under Tranche 2

If your client checks live in inboxes, shared drives, and a KYC spreadsheet, you are not alone. For years, that has been the default way many firms have handled identification and AML-style checks.

Under Tranche 2, that approach is about to be stress-tested, and for many firms, it will fail where it matters most: consistency, auditability, and scale.

The spreadsheet trap

• A staff member emails the client for documents
• Files get saved into a shared folder
• Someone types a few notes into a spreadsheet
• Everyone moves on to real work

The trap is that this only seems to work while volume is low, deadlines are loose, and nobody asks you to
prove exactly what you did six months ago.

Where manual processes really break

1. Inconsistent inputs — Different staff collect different information for the same client type.
2. Scattered evidence — Key evidence is split between email, local drives, shared folders, and practice-
   management notes.
3. Unclear ownership — When everyone is responsible for KYC, nobody really owns whether it is being done properly.

None of this shows up on a timesheet. It shows up when something goes wrong, or when a regulator or bank asks you to show your work.

Tranche 2 raises the bar

• Defined customer due diligence steps
• Documented risk assessments
• Ongoing monitoring and review
• Record-keeping that stands up to scrutiny

It is very difficult to meet that standard with ad hoc email trails and static spreadsheets. Even if you collect all the right information, you may not be able to demonstrate it quickly or clearly.

The hidden cost of just one more spreadsheet

• More follow-up emails to chase missing documents
• More time spent hunting in old threads
• More rework when someone forgets a step
• More anxiety when responding to queries or reviews

What looked like a free solution quietly becomes an expensive one in staff time and risk.

What a scalable approach looks like

• Guides staff through the same steps in the same order for each client type
• Captures data and documents in one place
• Automatically ties checks, risk ratings, and review dates to each client
• Produces an evidence pack when you need to show what happened

Where Signum Verify fits

• Clear onboarding flows for key client types such as companies, trusts, and SMSFs
• Built-in prompts for what to collect and check under Tranche 2
• Risk rating and review logic that is transparent and repeatable
• Evidence packs and audit trails that can be produced quickly

You still decide your risk appetite and policies. You still remain responsible for compliance. But the day-to-day work of gathering information, running checks, and keeping records moves from ad hoc tools into a purpose-built system.

Under Tranche 2, that shift from manual KYC to a structured workflow is not just about efficiency. It is about being able to show, with confidence, that your firm does what it says it does.