The KYC process: a major compliance effort for correspondent banks

Banks are looking to streamline their KYC processes for business to continue to thrive, improve client experience and satisfy regulatory demands.

The KYC process: a major compliance effort for correspondent banks

The need for a common standard

With more than 1.3 million bilateral correspondent relationships across the industry, the administrative burden for banks is significant each time a relationship is added or information needs updating. Yet it’s never been more important to ensure that due diligence on your correspondents and their downstream relationships is thorough, timely and accurate.

Banks are looking to streamline their KYC processes for business to continue to thrive, improve client experience and satisfy regulatory demands. One of the biggest challenges is the lack of a common standard, with different banks asking for different documents and information. The fragmentation of KYC processes across the industry heavily affect clients, requiring them to repeatedly provide the same information in different formats to their various banking partners. As a result this contributes to frustration among clients.

KYC process for banks

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Report: Solving the KYC Conundrum

This white paper delves into the difficulties treasury teams face as a result of KYC requests and explores the impact on their operations and banking relationships.

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Boost data quality

Poor data quality

Data quality also remains an issue. Many financial institutions struggle to access a single source of information that helps them develop a comprehensive view of each client.

The main challenges for financial institutions include:

  • Constraints on revenue generation
  • Significant costs associated with satisfying regulatory requirements
  • Impact on risk, and in turn revenue and costs
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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The way forward

- Streamline bilateral exchanges to support the secure, two-way exchange of data between correspondents

- Investigate technologies: robotics for data gathering and machine learning to lower false positives

- Adopt industry standards, such as those set out by The Wolfsberg Group, to foster trust and transparency

- Manage risk effectively

Solving the KYC challenges

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