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Major Banks Join Forces with SWIFT to Manage KYC Compliance Challenges

Major Banks Join Forces with SWIFT to Manage KYC Compliance Challenges

4 March 2014

Brussels, 4 March 2014 – SWIFT announces that it has signed a Memorandum of Understanding (MOU) with a group of major banks to jointly develop and use SWIFT’s KYC Registry, a centralised utility for the collection and distrfibution of standard information required by banks as part of their due diligence processes.

The group, which includes Bank of America Merrill Lynch, Citi, Commerzbank, JPMorgan, Societe Generale and Standard Chartered, will work together with SWIFT to build a service that will help banks manage their compliance challenges and reduce the high costs associated with implementing KYC-related regulations. SWIFT will operate the KYC Registry as an industry-wide utility with an initial focus on correspondent banking relationships. More banks are expected to join the initiative in the coming months.

As a part of the MOU, the banks will participate in a SWIFT-led working group to agree the Registry’s processes as well as the documentation and information necessary to fulfil KYC requirements across multiple jurisdictions. In addition, the banks will start populating the registry with their own KYC data.

Luc Meurant, Head of Banking Markets and Compliance Services, SWIFT said: “We welcome the close cooperation of these leading banks as we develop the KYC Registry. The banks’ involvement is an important step in this initiative to standardise the process and reduce the cost associated with KYC activities. The commitment from these banks demonstrates the importance of collaboration in financial crime compliance. Every SWIFT user will be able to benefit from our community-based solutions.”

In the coming months, additional banks are expected to join the KYC Registry and contribute their own up-to-date information for secure, centralised storage. Each Registry user will have a standardised access point to obtain details on their counterparties, while retaining ownership of their own information and control over which institutions can view it.

“By providing a central, standardised utility solution replacing bilateral document exchanges between each set of counterparties, SWIFT is helping to reduce the cost, and risk associated with KYC compliance,” said Javier Pérez-Tasso, Chief Marketing Officer, SWIFT. “It is encouraging to see the banks coming together around this initiative, which clearly demonstrates the value community-based solutions can bring to this challenge.”
The KYC Registry is the latest in SWIFT’s expanding portfolio of compliance solutions, which already includes Sanctions Screening and Sanctions Testing solutions, and will soon be complemented by a new compliance analytics service. The Registry is expected to go live at the end of 2014 with a controlled ramp-up planned during the summer of 2014.

Notes to editors:

Here is what some customers are saying about the KYC compliance challenge:    

Udo Braun, Member of the Executive Board, Group Compliance, Commerzbank, said: “Commerzbank is very pleased to take part in the KYC Registry initiative. We are convinced that the KYC Registry will help our industry work more efficiently and effectively to support compliance with KYC requirements.”

Pascal Augé, Head of Global Transaction & Payment Services, Societe Generale, said: “One of the major challenges with KYC activities is maintaining accurate information.  Having a single, centralised Registry for up-to-date KYC information will reduce the time, effort and cost related to gathering, accessing and sharing KYC information. We are pleased to join this collaborative effort to make the KYC Registry a reality.”

David Fleet, Managing Director of Client Due Diligence, Standard Chartered, said: “This is a great opportunity for major players across the industry to collaborate towards a global solution that will benefit our clients and better manage risk.  With an established partner like SWIFT, we are well-positioned to increase efficiencies, reduce complexity, and continue to improve our KYC process.”

SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,000 financial institutions and corporations in 212 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

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