Spectra: A Rules-Driven LLM Pipeline for Automated KYC Document Processing

Abstract:Know Your Client (KYC) onboarding in capital markets requires analysts to manually classify documents, extract structured data from heterogeneous sources, and validate compliance against complex regulatory policies. This process requires significant analyst time per client, with end-to-end onboarding often stretching to multiple weeks due to sequential handoffs. In this work, we analyze an on-boarding process and find that it comprises repeatable components well-suited to AI automation. We therefore propose a restructured workflow to be amenable to automation: we consolidate the traditional four-party process into two parties that share most of the work and can be automated together, eliminating intermediate handoffs that compound delays. To automate the remaining steps, we introduce Spectra, an AI-assisted document processing platform that combines a structured rules engine with LLM-based classification, extraction, and validation agents. The rules engine encodes compliance policy as a queryable database, enabling focused context injection that reduces token usage while improving extraction precision. Rather than a single monolithic prompt, the system decomposes document processing into isolated, auditable stages, each optimized independently and traceable to specific policy clauses. In evaluation on real KYC documents, Spectra achieves 100% classification accuracy and 89.4% extraction accuracy. Human review burden dropped by 96%.

Artificial Intelligence (cs.AI)

arXiv:2609.25474 [cs.AI]

(or arXiv:2609.25474v1 [cs.AI] for this version)

https://doi.org/10.48550/arXiv.2609.25474 Focus to learn more arXiv-issued DOI via DataCite (pending registration)

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