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Regulatory Risk

KYC services support compliance worldwide through operational effectiveness

Steve Pulley

20 Oct 2015

REUTERS/Sigtryggur Ari

Recently, several thousand business leaders, decision makers and topical experts from diverse financial institutions, market infrastructures, global corporations and technology providers attended the annual Sibos conference, exhibition and networking event in Singapore.

At the fore of this year’s Sibos gathering was the two-day Compliance Forum, where professionals addressed collectively the due diligence challenges of financial crime – encompassing Know Your Customer (KYC) and Anti-Money Laundering (AML) and specifically, the deep impact of regulatory requirements on financial institutions and how the industry can best mitigate compliance-related risks and costs.

One Sibos break-out session “discussed industry progress on developing financial crime compliance utilities, how they have gained increasing support as a concept, in what areas the utility model has shown the greatest promise, what has been the level of industry engagement to date, and whether greater industry cooperation could help reduce the costs and risks of addressing compliance-related challenges.”

Commenting in a Waters Technology column on how “this year, Know-Your-Customer data has emerged as a greater concern on the Sibos agenda,” Inside Market Data editor Michael Shashoua opined that while several KYC solutions providers “have been available for a year or more . . .the presence of multiple KYC solutions raises the question of whether data will be consistent among all services, and whether those offerings will produce efficiency gains and cost savings in the process of better managing KYC data.”

Last but not least, the Waters opinion column notes points raised by two banks that consume data on:

“the need for data quality amid all the KYC data standards which vary depending on who is providing the data and the different rules that are in force in whatever market that data emanates from. This raises questions about whether the industry can manage KYC data effectively to meet regulatory imperatives.”

KYC solution breaks 10,000 records barrier

With the aforementioned observations in mind it’s exciting that we can provide customers with a highly significant operational update related to our market-leading KYC Managed Service. The global Know-Your-Customer (KYC) solution has cleared a key milestone by building, publishing and maintaining 10,000 fully-screened KYC records this past month.

The infographic captures this major achievement to keep KYC and AML-minded firms compliant globally.

KYC 10,000 infographic

It was announced that we have surpassed the barrier of having fully validated and screened these 10,000 KYC entity profile reports for our clients in accordance with a global policy. And since we launched Thomson Reuters KYC as a Service solution to the market in March 2014, the productivity of our operations team has risen exponentially over the past six months.

Impact on the industry?

What does this milestone mean for our customers and the industry as a whole?  Banks and other financial institutions who need to obtain information on legal entities can look to KYC as a Service and our 10,000 validated and screened records as a trusted partner to help meet their regulatory requirements.  Similarly, contributors to KYC as a Service have a trusted partner to streamline the exchange of their KYC information.

BlackRock, a leader in investment management, risk management and advisory services for institutional and retail clients worldwide, selected Thomson Reuters KYC as a Service earlier this year to enhance their robust Counterparty Due Diligence process for a global universe of trading counterparties, leveraging our KYC screening and ongoing monitoring capabilities. We delivered the entire population of records in a high-quality manner in just three months and have been extremely responsive to BlackRock’s needs.

“We have selected Thomson Reuters KYC as a Service to further augment the screening and ongoing monitoring of trading counterparties,” said Robert Goldstein, Chief Operating Officer of BlackRock. He continues: “Thomson Reuters ability to leverage other assets across their suite of risk solutions in an integrated offering provides us with an effective resource to complement BlackRock’s counterparty risk management program.”

ISAE 3000 accreditation

As an equally noteworthy milestone, I’m proud also to share that KYC as a Service has successfully completed the second phase of an ISAE 3000 accreditation exercise for the design and operational effectiveness of its internal control framework. This ISAE 3000 Type II report was issued by PriceWaterhouseCoopers.

Developed by the International Auditing and Assurance Standards Board, the ISAE 3000 assurance standard is one of the most widely recognized standards in the industry.  What’s more, Thomson Reuters KYC as a Service remains the first and only KYC services solutions provider to receive ISAE 3000 accreditation. So, while we undoubtedly have a long road before us, it is clear from the hurdling of these industry-affirming operational milestones that the future is bright for Thomson Reuters KYC as a Service.

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