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Would you ask someone else if they Know Your Client?

With eye watering fines and the threat of deferred prosecutions, many banks have been working hard to solve the problems of correctly identifying and screening clients for financial crime purposes over the last few years. As they have done so, it is clear that a number of parts of this process are common across banks and so potentially could be provided on a centralised basis.

This has prompted a growing number of providers to offer Know Your Client (KYC) services in this space:

The challenges of KYC differ significantly between entity/company customers and individuals with more public domain being readily available for entities than for individuals. This is why most providers are concentrating their efforts on the simpler problem of KYC for companies - although in most big banks the greater benefit would be through solving the problem for individuals. Also, regulators in some countries are much less likely to allow data on individuals to be shared outside their countries. So, it is not surprising that the States of Guernsey are looking at providing a solution for its high net worth customers, and being based in Switzerland may be an advantage for KYC Exchange. Also there is the issue that the information available to and from these third party operations is only part of the overall solution - there is still a significant part for each bank that is institution specific.

So overall some interesting innovation to help reduce a difficult problem even if it can only be a partial solution to a bigger problem.

 

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John Cant

John Cant

Managing Director

MPI Europe Ltd

Member since

06 Jul 2004

Location

London

Blog posts

45

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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