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KYC solutions market is horrendous: Bloomberg exit

Neugroup reported yesterday that “Bloomberg plans to shut down Entity Exchange, a know-your-customer (KYC) solution supported by Citibank and adopted by multinational corporations including Coca-Cola”. 

Neugroup reported, “The company didn’t provide a reason for closing the businesses or say when the process will be completed.” CTMfile found the same “no comment” in the London office too. Apparently, it will be done over the next three months as there was insufficient demand for Entity Exchange.

Corporate treasury department needs

Corporate treasurers need a flexible solution that accepts the realities of the global problem: no global standards, local variations everywhere and need for complete flexibility to deal with each corporate treasury departments different needs. 

Coca-Cola’s director of international treasury, Jim Aschmeyer, felt he had found the solution with Entity Exchange. Neugroup’s iTreasurer report that “Mr Aschmeyer spent six months looking for what he calls “partners in crime.” The result was a team consisting of Citi, Bloomberg, Coke and four other large Citi customers—Merck, UPS, Cargill and Procter & Gamble.”

Crowded market with very different services

In February, SWIFT, the international payments network, entered an already crowded market for KYC services. They announced that in Q4 2019, all 2,000 SWIFT-connected corporates will be able to join the KYC Registry and use it “to upload, maintain and share their KYC information with their banks.” This ramped up the competition considerably and must be one of the reasons that Bloomberg are withdrawing from the market.

KYC services competitors include IBM, IHS Markit, Thomson Reuters, encompass and Tradle. These solutions are very different and over the coming months and years, CTMfile will continue to review and compare these.

CTMfile take: Bloomberg’s withdrawal of their Entity Exchange is not a major surprise as they have already ‘retired’ their attempt to join the TMS market with Bloomberg TRM in November 2014 which also failed because there was not ‘sufficient interest’ and, critically, it was not the sort of business model they were used to. The same thing seems to be happening here five years later. Many people worldwide will be sad about this.

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