SWIFT will soon open up membership of its KYC Registry, used by nearly 4,000 correspondent banks and funds players, to all supervised financial institutions. The registry is used as a secure repository where know your customer (KYC) data and documents are stored and can be shared by users. The registry supports KYC compliance and reduces due diligence costs for banking counterparties.
It was launched in December 2014 and members originally had to be SWIFT-connected supervised institutions. From September 2017, any supervised financial institutions can join the registry, regardless of whether they are connected to SWIFT.
SWIFT's Luc Meurant said: “Extending KYC Registry membership to all eligible supervised financial institutions means that current Registry members will profit from even broader coverage of their correspondent banking and funds distribution networks, allowing them to further consolidate and streamline their customer due diligence activities. In parallel, smaller institutions will benefit from industry-agreed standards and best practices in know your customer compliance. As well as delivering efficiency gains and cost savings, the move will foster financial inclusion and further strengthen the Registry’s position as the KYC utility of choice for the global financial industry.”
Need for third-party services on KYC compliance
Regulations requiring stringent KYC documentation and data are becoming an increasing burden for both banks and corporates. SWIFT's registry helps to streamline this process. But it's not the only KYC on-boarding service that is becoming increasingly popular among banks and their customers. A solution from Thomson Reuters, Org ID KYC, was launched in 2014 and serves 26 major financial institutions and asset management firms, manages over 350,000 KYC records and publishes more than 1.25 million continuously refreshed legal entity profiles. The trend is clear: corporates and financial institutions are required to comply with KYC regulations but it sucks a huge amount of their time away from their 'real' business. Using a third-party to go through the due diligence and checks must be the way forward and this is where the products from Thomson Reuters and SWIFT's registry can make a big difference to users.
CTMfile has covered this topic several times:
KYC alone is not enough to prevent AML and other fraud types
“Know your transaction” and “KYC recency” are vital, but will it ever be achieved? How are corporates going to do this?
Thomson Reuters’s lead in 3rd party KYC grows as acquires Clarient & DTCC’s Avox
Acquisition of two key players to bolster their Know Your Customer (KYC), client reference data and legal entity data capabilities increases pressure on corporates to use third party services
KYC services expand to include due diligence across all regulations and regions
kyc.com’s KYC and due diligence service gains traction with more member banks and more corporate users