Requirements for customer due diligence are filled with complexity and nuance. To understand the Know Your Customer (KYC) challenges faced by both banks and corporates alike, we caught-up with industry experts from BASF and BNP Paribas for their respective insights. They shed light on their specific learning points and how SWIFT’s KYC Registry is helping them streamline the collection of KYC information.
Ludwigshafen, Germany-based BASF is one of the leading chemical companies in the world. With operations in more than 90 countries, their business interests require meticulous due diligence from a regulatory perspective. BASF spent a great deal of time looking for a KYC tool and BNP Paribas was ready to pilot SWIFT’s KYC Registry with them.
We recently sat-down with Kristina Merkle-Wechsler, Senior Manager, Cash Management Governance at BASF and Rebecca De Cuyper, Senior Banker CIB Corporate Transformation Management and Business Sponsor for SWIFT’s KYC Registry, on behalf of BNP Paribas. From both a corporate and banking perspective, they shared their views on the KYC Registry’s added value for corporate due diligence.
What were some of the KYC issues you had within your treasury function at BASF before the KYC Registry?
Merkle-Wechsler, BASF: “KYC has become increasingly cumbersome in recent years. We’ve had more requests from banks to provide documents and information within the KYC process. It became difficult to keep a centralised view of who was asking for what and where our documents were being sent. We felt it was time to have a tool to help us here.”
What was the bank’s consideration behind the need for the KYC Registry?
Rebecca De Cuyper, BNP Paribas: “KYC is time consuming and banks are very conscious of that. We wanted to present a solution that met the expectations of our clients, in other words one that offers a global standard, centralises the KYC information of all entities within a business group, mutualises this information among their relationship banks and verifies the KYC information before release.”
“Today banks want to adopt the Registry not only to improve operational efficiency, but also to reduce the significant costs related to KYC processes. This is most effective if banks and corporates use a common global solution. SWIFT’s KYC Registry addresses this need.”
How has conducting business with multiple banks at once affected the KYC process?
Merkle-Wechsler, BASF: “If we need to provide documentation, we want to do it in the most convenient and standardised way, the same way for all banks. SWIFT has the power to help with this harmonisation and that was the most important criteria. There’s also trust in the tool itself when it comes to security and data handling. The intuitive use of the platform is also important. Finally, the fact that there’s no cost to corporates was also very convincing for us.”
How has SWIFT’s KYC Registry helped you improve efficiency?
Rebecca De Cuyper, BNP Paribas: “The more KYC information is centralised and complete, the more banks can reduce the lead time for data and document collection and keep bilateral exchanges to a minimum. By doing so, more time can be spent on the value added relationship development. Based upon the positive experience we have had with the platform for correspondent banks, BNP Paribas has strongly supported extending its scope for corporates and non-bank financial institutions. The higher the adoption of the platform, the higher the quality standard will be. The modularity of the platform will allow us to cover KYC requirements to the maximum extent since the baseline will be adjusted by client segment type, jurisdiction and activity.”
Merkle-Wechsler, BASF: “In our headquarters in Ludwigshafen, we work with a lot of banks and there are colleagues from different departments involved in KYC updates. Providing the data via one single tool is a process change that has helped us save time and makes us more efficient. We are about to roll out the tool to other BASF Group companies and hopefully can cover KYC requests with SWIFT’s KYC Registry for a large number of them. The tool is quite intuitive. Once the people are trained, we can further streamline this process.
The strength of SWIFT KYC Registry is that it is global, secure and central. How can we encourage industry-wide adoption?
Rebecca De Cuyper, BNP Paribas: “As a cooperative of banks, trusted for over 40 years and present in more than 200 countries, SWIFT is well placed to drive the adoption from banks worldwide. Financial institutions inform their corporate clients about the benefits of the Registry and encourage them to onboard. Once corporates have explored the online platform and contributed with their own info, we expect they will take over the promotion. Additionally, in view of an enhanced implementation of the prevailing AML and CFT regulatory framework, regulatory bodies might find in SWIFT a legitimate partner that provides a central, primary source of KYC information.”
What advice do you have for other banks or corporates considering joining the KYC Registry?
Rebecca De Cuyper, BNP Paribas: “It is certainly worth considering the operational and cost efficiency SWIFT’s KYC Registry can offer for banks and their customers. The positive user experience for correspondent banks has been the major driver for BNP Paribas to propose the platform extension to corporates as well as to non-bank financial institutions. The more banks that adopt the Registry, the more multi-banked customers will enjoy this optimised platform. So far, corporates appreciate the Registry’s user friendliness and they are engaged to continue their contribution with the expectation that their relationship banks will use their KYC data and documents from the SWIFT’s KYC Registry. It is also interesting to consider that corporates can use the platform for their own KYP, KYS or KYC.”
Merkle-Wechsler, BASF: “My advice is, don’t be afraid of any technical obstacles. You might expect it to be complicated because it’s a new solution, but just try it. For us, it was a case of trial and error at the beginning, and SWIFT was very helpful in ensuring that we submitted our documentation correctly. It’s a tool that helps you provide information that you would have had to provide anyhow. It’s easy to handle; a lot of people are afraid of having a new tool, but don’t be.”