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KYC Exhange Net launches Web-based platform for due diligence data sharing

17 January 2014  |  5087 views  |  2 Digital Abstarct

Switzerland-based KYC Exchange has launched a Web-based communication platform for Know Your Customer (KYC) and Customer Due Diligence (CDD) data sharing for the international banking community

The global launch of the platform follows testing in September with banks from across Europe and Asia. The participating pilot banks included globally active investment and transaction banks, private banks as well as banks with regional focus, in particular with Eastern European and Middle Eastern links, says the company.

KYC Exchange Net allows for the exchange of validated KYC data between regulated financial institutions such as banks and their clients. Feedback from bank pilots indicates time savings of up to 90% in the front office where client data is being collected. The firm says further savings of up to 50% are expected in the middle and back office as the KYC data which is verified and validated is more complete and accurate than traditionally collected data.

European banks take on average 30 days to obtain the client's KYC data - for a recurring KYC (KYC renewal) this increases to 74 days. The new KYC platform is designed so that a client bank can release accurate KYC data to any counterparty bank in less than five minutes.

Majority-owned by Zurich-based conglomerate IHAG Holding, KYC Exchange Net has yet to confirm any bank subscribers to the service.

The venture will soon face competition from the banking co-operative Swift, which earlier this month announced plans for the creation of a global Know Your Customer (KYC) Registry to provide users with access to a central repository of up-to-date institutional information shared by participating banks.

Comments: (2)

enrico camerinelli - Aite Group - Boston | 17 January, 2014, 19:03

In the interest of banks and of corporate clients, SWIFT and KYC Exchange are still in time to avoid harmful and unnecessary fierce competition. Both are focusing to develop a global KYC repository and if they do it right they will create the best conditions for true collaboration, bringing value to all parties involved: Themselves, banks, and banks’ corporate clients.

  • KYC Exchange has the technical skills to develop a solid web-based platform for KYC and due diligence, but has no bank participants as of yet.
  • SWIFT has the network of banks and the credibility to establish internationally de-facto recognized standard procedures and practices for KYC.

If SWIFT only would refrain from the temptation to act as a software house and instead stick to its core values (i.e., “act as the catalyst that brings the financial community together to work collaboratively to shape market practice, define standards and consider solutions to issues of mutual interest”- source:  www.swift.com) they could provide the necessary guidelines, criteria, and datasets that KYC Exchange would then implement into software applications.

Collaboration between SWIFT and KYC Exchange along the suggested lines is the only factual way I anticipate can turn into real value the proposition of a global KYC Registry as recently announced by SWIFT.

 

A Finextra member | 20 January, 2014, 04:57

This is a welcome move by KYC Exchange

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