Would this hold up in court as actually "knowing" your customer if you let an AI handle it?
It's a pain in the ass exactly because it's critical at a level of "oops we lost our license to do business", and part of the pain is the unending edge cases that require personal attention that any attempt to automate will immediately have to break out to a real person. So you end up keeping your headcount of the expensive people and layering another expense on top for no value.
AI agents are a screening tool to wees out interactions that would be a cost to the business rather than an opportunity ie in non-specialised situations (for example customer queries where the answer is the first question in the faq).
They are not a solution to highly specific b2b workflows, and especially not when a regulatory body will always be at couple of decades behind technology.
It is certainly a tough balance for banks/fintechs -- fear of accountability vs. a clear value add. From our interactions, using AI to automate low/medium risk is welcomed. The solution can perform in a robust way and often is more accurate and better than a human (note we're improving it all the time!).
For those that are more risk averse there is another option: the Agent can just surfaces all the relevant information and then a human has to sign-off on the last onboarding action, hence making their jobs 10 times easier.
It'll be interesting to see how AI adoption unravels in the space but it's certainly showing good signs!
You can also choose to bucket your customers by risk level and require manual review for higher risk customers (e.g. certain business activities like crypto or gambling, complex ownership structures or foreign UBOs). Ultimately the level of automation vs review is up to the risk appetite of the customer, as they are the one that has to answer to the regulator.
And at least at banks >99.9% of KYC/AML interactions have been automated for many decades now.
The rest are things you wouldn't want an LLM anywhere near e.g. sanctions evasion for which require significant expertise and lots of care.
I'd say there are varying levels of automation, where even to this day within low/medium risk, ~30% of cases get to manual review, and with some that number can be even higher!
Yes sanctions is one area where the human touch is very important! Definitely a high risk category