Know Your Customer continues to be a problem world-wide. Not surprisingly new products and technologies keep appearing to be THE next solution. However, it is not new technologies that are needed but trust in the whole solution: in the technologies, in the structure, in the numerous processes and systems that are used.
Large MNCs are starting to realise that to solve (or at least manage the position) they need to make key choices:
- Decide what they want to store/process internally and externally
- In the third party KYC solutions: what is acceptable to them and what sort of structure, processes and systems do they really want.
Third party solutions
There are three main KYC third party platforms:
- Bloomberg’s “Entity Exchange” a secure and streamlined way to provide sensitive documents and data critical to the onboarding process in banks and FIs regardless of which KYC standards and policies they use
- KYC.com from Genpact and Markit who are now partnering with Dow Jones, Exiger, and Regulatory DataCorp
- Thomson Reuters’s “KYC as a Service” (originally OrgID).
all vying for the corporates’ KYC business
Telling the banks which platform to join
Over the last two years corporates have slowly been adopting one, and, occasionally, two of these platforms depending on which their banks used as they realise that the KYC problem is not going away. Now corporatess have more experience and understanding of the platforms they are now are telling their bank’s which platform to join.
A particular worry with many corporates is the number of copies of the passport of senior treasury staff are held by the banks. One corporate has adopted a specific third party KYC platform because of its trackability, flexibility and the ability to manage, e.g. tracking who asked for a passport. This was a key reason why they are now asking their banks to sign up with this platform.
CTMfile take: The battle of the KYC platforms has now really begun. Who do you trust? Who will you ask your banks to join?
KYC: Outsourcing is the answer……?
BUT: who is responsible? Who pays? What happens when the service is hacked? Who owns the data?
KYC is persistent problem in trade finance
The global trade finance gap, or unmet demand for trade finance, remains stable at $1.5 trillion in 2017 but KYC requirements are putting banks off financing transactions for smaller firms
KYC - everyone looking for a magic bullet
Costs keep rising as banks try new technologies to get a grip of the problem