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Third party risk

Know your customer industry standard to make global business easier

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The management, verification and maintaining of know your customer (KYC) records has always been a burdensome task for both financial institutions and their customers alike.

Regulations that require organizations to provide the same information in different formats to many different requestors, and then have it verified and updated on a regular basis, have been around for a long time. In recent years know your customer (KYC) regulations have tightened exponentially, as have the penalties for breaching it.

Technology has afforded us the ability to make great strides in the gathering, collating, labeling and storage of data but cost and resource effective managing of KYC procedures are lagging behind the times and are still a largely labor intensive process.

The need for standardization of KYC policies and procedures is fast becoming essential.

The cost of KYC procedures

Infographic shows the cost of know your customer procedures averages $60m a year for financial institutions and is repetitive for corporations, too.
KYC procedures are onerous for financial institutions and corporations alike.

Meeting the growing KYC need

Thomson Reuters Org ID KYC Managed Service simplifies and streamlines customer counterparty due diligence and the ongoing maintenance of KYC records.

The recent acquisition and integration into Thomson Reuters Org ID managed service solution, of two leading players in the KYC managed service, Clarient Global LLC and Avox from DTCC, will make it easier for institutions to conduct global business.

Clarient is a leading global KYC and client reference data platform owned and used by the Depository Trust & Clearing Corporation (“DTCC”), Barclays, Credit Suisse, Goldman Sachs, J.P. Morgan, BNY Mellon, and State Street, among others. Avox is a leading supplier of legal entity data, hierarchies and identifiers on financial entities globally, owned by the DTCC.

Steve Pulley, Thomson Reuters managing director Risk Managed Service, has welcomed the integration pointing out that the benefits are many.

“The industry has reached a pivotal point where Banks, investment managers, hedge funds, and corporations are required to conduct extensive on-going due diligence on prospective clients and their affiliations in order to comply with growing regulatory demands,” said Pulley.

The acquisition of Clarient and Avox takes us one step closer to creating an industry standard with a solution that enables institutions to seamlessly conduct necessary due diligence to know who they are doing business and ultimately make better informed decisions.”

The acquisition follows on from the formation of the recent South Africa KYC Managed Service whereby three South African banks co-partnered with Thomson Reuters to offer a central, secure portal where corporates and buy-side firms can share their information with their banks.

It is envisaged that this model will be used as a blue print for a roll out in other locations across the globe.

The KYC headache for financial institutions and their customers is now well on its way to becoming a standardized and trusted process which will meet not only their current needs but those of the future.


Learn more

Download the latest KYC survey report 

Thomson Reuters Org ID KYC Managed Service is a global solution developed for banks, investment managers and corporates to simplify and streamline customer counterparty due diligence and the ongoing maintenance of KYC records — through collecting, classifying and verifying a client’s identity — in line with ever-changing regulatory demands.

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