Leveraging industry collaboration to tackle KYC challenges

As regulatory requirements increase, corporate treasurers dedicate significant resources and time to performing Know Your Customer (KYC) compliance processes

For corporate treasurers, KYC data management is one of the most frequently cited pain points in their banking relationships. Multinational companies hold accounts with several banks and subsidiaries, and for each one of them they need to provide and maintain up-to-date data. 

As a result, the review of KYC information can be time-consuming and costly for all parties involved. 

KYC
Last update: 
5 December 2019

Solving the KYC Conundrum

Drawing on discussions with numerous treasurers around the world, this white paper delves into the difficulties...
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A central repository to manage KYC information

Corporates frequently state that, because their banking partners cannot exchange KYC information directly with one another, they have to repeat the same processes for every bank that they do business with. In addition, KYC requirements may differ from one jurisdiction to another. 

On the corporate side, this translates to additional time spent collating and submitting data for each individual bank they work with.

On the bank side, gathering accurate and up-to-date KYC data can also be a challenge. Information is often disseminated across multiple sources, incomplete, or out of date, and banks need to repeatedly follow up and update information with their corporate customers. 

The SWIFT KYC Registry for corporates, a new central repository for standardised KYC information that will be accessible on demand by authorised banks, aims to address these inefficiencies. It will provide a secure self-service repository to simplify the KYC due diligence processes once and for all. 

The solution, set to launch later this year, will put corporates in control of who accesses their information. From that point, banks will be able to access up-to-date information as and when they need it. 

This self-service model will facilitate onboarding and review procedures, resulting in faster, more efficient ways of working.

KYC process for banks

Applying standards to streamline KYC processes

Today, a corporate based in Europe who works with suppliers in Asia and sells in the US may have to use a banking partner in each region. In order to open accounts in these banks, the corporate must provide KYC information to each institution, and the format as well as supporting evidence required may vary between jurisdictions.

With the SWIFT KYC Registry for corporates, companies will input all their KYC information in a single format – based on a community-defined set of requirements – reducing the time spent filling out different forms.

The solution will also provide a flexible platform and enable corporates to upload additional documents to cater for local jurisdictions’ specific requirements.

Besides the simplification of KYC data management, the registry will facilitate regulatory reporting processes by allowing users on both the corporate and banking sides to document their complete audit trail. 

KYC documentation

Informed by industry professionals

KYC is an industry-wide challenge, and greater industry collaboration will be key to meeting it. In order to develop a solution covering the needs of a wide range of corporates and banks, both in terms of data contribution and consumption, input from the community is essential. 

That’s why we have set up a working group comprised of 31 participants from SWIFT-connected corporates and banks. The group officially launched in early March 2019 to collaborate on the solution design and ensure optimal usability of the KYC Registry for corporates.  

To support the working group and receive updates about this key initiative, we encourage you to actively get involved in the journey and join our engagement group. There are no strict obligations in regards to the time spent by participants, and your input will directly inform the activities of the working group. Members will provide essential feedback on requirements and ideas to develop cost-effective and time-efficient KYC processes.

To find out more and get involved, please email KYCRegistry.Corporates@swift.com.
 

Related

Resource

Solving the KYC Conundrum

Download (8.46 MB)
  • Reports
  • White Papers
EN
Financial Crime Compliance

Know Your Customer (KYC)

In an increasingly global economy, financial institutions are more vulnerable to illicit criminal activities. Know Your Customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing.