Financial Crime Compliance (FCC) What do we hear from regulators & banks?
• Strong pressure to implement EFFECTIVE systems, processes and policies across KYC,
Screening and Monitoring
• QUALITY ASSURANCE / INDEPENDENT TESTING increasingly necessary to prove
effectiveness and alignment to risk appetite
• Evolution towards senior level ATTESTATION/CERTIFICATION in some jurisdictions
• COST PRESSURE. Current situation not sustainable. Significant EFFICIENCY
improvement required – but not at the expense of an increased risk profile
• Growing COMPLEXITY of FCC regulatory requirements and expectations
• Reaching the tipping point for UTILITIES: openness from regulators and increasingly
strong drive from large banks
• Clear trend towards more TRANSPARENCY and more CONTROL, sometimes leading to
re-structuring of clients’ portfolios (de-risking) and internal organisation changes
KYC Registry 2016 - Nov 2016 - Central Bank Workshop - Restricted
SWIFT FCC Roadmap : Towards three inter-connected Utilities
Sanctions Analytics/AMLKYC
Interconnected Utilities leveraging commonalities
and data between the products & services
Financial Crime Compliance Utility
e.g.
• Transaction
screening
• Sanctions Testing
• List Management
• Name/Client
Screening
e.g.
• KYC Registry
• KYC Market Place
e.g.
• Compliance Analytics
(evolving toward
Bank-to-bank
monitoring)
• FATF 16
For ALL SWIFT users (small AND large) over time
KYC Registry 2016 - Nov 2016 - Central Bank Workshop - Restricted
The KYC Registry - Concept
Standardized KYC Baseline
Up-to-date information
Data verification by SWIFT
Cooperative business model
Confidential, user-control access
Single source of correspondent banking KYC information
The KYC Registry - Info session - Meeting with FMA - Nov 2016 - Restricted
… driven in partnership with leading Financial Institutions
DrivesAdoption
PromotesStandards
DesignsRoadmap
ValidatesFeatures
… and looking at the evolution with industry leaders like
More than 3,000 financial institutions across 1,150 FI Groups1,600+ in Europe, Middle East and Africa
800+ in Asia Pacific
500+ in the Americas
200+ countries and territories worldwide
30 central banks
Launched in December 2014 in collaboration with Bank of America Merrill Lynch, Barclays, Citi, Commerzbank, Deutsche Bank, Erste Group Bank AG,
HSBC, ING, J.P.Morgan, Raiffeisen Bank International AG, Societe Generale, and Standard Chartered Bank. 6
KYC Registry 2016 - Nov 2016 - Central Bank Workshop - Restricted
The KYC Registry – 30 Central Banks on boardSpecific community deals in Armenia, Bolivia, Dominican Republic, Georgia, Greece, Moldova, Panama, Costa Rica
KYC Registry 2016 - Nov 2016 - Central Bank Workshop - Restricted
0
200
400
600
800
1000
1200
Requester Groups Approached Entities Granting Entities
A clear upward trend
and acceleration over
the past weeks
2016 consumption – reaching a tipping point?
Category I - Identification of the customer Licenses and Proof of Regulation, Certificate of Incorporation, et cetera
Legal name, auditor, regulator, addresses
Category II – Ownership and management structure* Declaration of key UBO and shareholders : full names and identifying data
Board of Directors Lists: full names and identifying data
Group structure
Annual Reports, Shareholder listings, certified group and organisational charts
Category III – Type of business and client base Revenue breakdown by legal entity
Operating geographies and customer verticals
Category IV – Compliance information Enhanced AML Questions
AML docs: e.g. AML Controls, Wolfsberg Questionnaire, US Patriot Act
Category V – Tax information TIN, GIIN,FATCA information & proof of registration, documentation
A standardised KYC baseline… and evolving
* The KYC privacy policy sets out the roles and responsibilities of SWIFT and its customers with regard to the collection and processing of personal data
Transparency and Validation:
• Completeness and accuracy of validated information against supporting documents
• Coherence checks between documents
• Checking documents against public sources (where possible)
• Local format of document with an English version.
• No judgmental or subjective checks (e.g. veracity of AML-related questions)
• Validation undertaken by industry professionals who understand the context & are language
proficient
1 check/data field and on average 8 checks/document for 98 data fields and 34 documents
KYC Registry 2016 - Nov 2016 - Central Bank Workshop - Restricted
Thorough and evidence-based data validation
Since June 2016
What‘s next – Client lifecycle touchpoints • KYC Registry
Collection
Verification
AssessmentDecision
Monitoring
New client on-boardingPeriodic review
Risk Management
• KYC Adverse Media
• Advanced notifications
• Due Diligence Analysis
Data Quality
• Request KYC data updates
• Pro-active distribution of data
Client Coverage
• Invite your clients to join
• Non BIC banks / NBFIs
• Fund distributors
• (Corporates)
Content
• BWO / SWIFT Ref integration
• EDD baseline
• Selective data sharing
The KYC Registry - Info session - Meeting with FMA - Nov 2016 - Restricted