SWIFT KYC Registry
Benelux Forum
Dominik Gajerski
20 March 2014
2
Financial crime is top of
the agenda for banks
A community issue calling for a community
solution …
Financial crime is t...
3
KYC Registry on the Compliance Roadmap
FATF 16 Information quality
Compliance Analytics
Sanctions list
management servic...
4
Introducing the
KYC Registry
from SWIFT
KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
The Context
An unprecedented challenge to comply with KYC legal requirements
5
SWIFT
KYC
Registry
Complex and
inconsistent...
SWIFT KYC Registry in a Nutshell
Your single source of correspondent banking KYC information
Industry-owned
Well establish...
Collection of data and documents
• Structured data
• Supporting documents
• Maintenance
• Archiving and versioning
Control...
8KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
Registry Content & Controls
• Comprehensive set of...
9KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
Registry Content Structure
Entity summary
I. Ident...
Set of Proposed Controls
10
Data Documents
Completeness Field is filled in and matches with
the type of requested informat...
11KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
Registry Features & Functionalities
• Search and ...
12
SWIFT Profile
A standard traffic-based report
to support your KYC
KYC Registry – Benelux Forum – 20 March 2014 – Confid...
13KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
SWIFT Profile
A new way to bring more transparenc...
14KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
SWIFT Profile – Granularity
SWIFT Profile
Level 1...
KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public 15
Optional split between US Dollar and other curre...
16
Community
Engagement
Advise, pilot and support the
go-to-market
KYC Registry – Benelux Forum – 20 March 2014 – Confiden...
17
January ’14
• Formal announcement of the
KYC Registry initiative
• Start of KYC Working Group
• Begin data collection w...
Bootstrap Strategy
Leverage large banks network to reach to the broadest community
18
• Obtain a critical mass of informat...
19
• Scope definition
• End-to-end content and controls definition
STREAM 1:
Scope, content and controls
• Extensive testi...
KYC Registry Working Group Participants
6 institutions engaged pro-actively with SWIFT
20KYC Registry – Benelux Forum – 20...
21SWIFT KYC Registry – 2014 – Confidentiality: Public
Controlled Ramp-up
• 10 to 20 banks (all segments) contributing with...
22SWIFT KYC Registry – 2014 – Confidentiality: Public
Controlled Ramp-up
Next steps
• SWIFT to invite customer to particip...
KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public 23
Thank you
Bart CLAEYS
Head of Compliance Services - KYC
bart.claeys@swift.com
+32 2 655 34 50
Contact details
25KYC Registry – Benel...
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Benelux forum 2014 - KYC registry

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Presentation from the SWIFT Benelux Forum that took place in La Hulpe on 19/20 March 2014.

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Benelux forum 2014 - KYC registry

  1. 1. SWIFT KYC Registry Benelux Forum Dominik Gajerski 20 March 2014
  2. 2. 2 Financial crime is top of the agenda for banks A community issue calling for a community solution … Financial crime is top of the agenda for banks Significant costs at stake…. All geographies / All types of players impacted ... Yet no competitive advantage for banks Lots of duplication… … for universal challenges KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  3. 3. 3 KYC Registry on the Compliance Roadmap FATF 16 Information quality Compliance Analytics Sanctions list management service Sanctions KYC AML Processing services Traffic analysis Standards Data repositories KYC registry AML testing & tuning Sanctions Screening Sanctions Testing & tuning (transaction & client systems) Traffic restriction (RMA) Live Development Qualification Exploration Quality Assurance Client/Name screening KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  4. 4. 4 Introducing the KYC Registry from SWIFT KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  5. 5. The Context An unprecedented challenge to comply with KYC legal requirements 5 SWIFT KYC Registry Complex and inconsistent requirements across jurisdictions Cumbersome, repetitive and inefficient bilateral exchanges Unavailability and poor quality of information Complex and inconsistent requirements across jurisdictions Cumbersome, repetitive and inefficient bilateral exchanges Unavailability and poor quality of information KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  6. 6. SWIFT KYC Registry in a Nutshell Your single source of correspondent banking KYC information Industry-owned Well established, neutral partner renowned for driving standardised, industry-wide solutions SWIFT KYC Registry Collaborative & user- controlled Banks submit, maintain and selectively exchange data through the platform Unique value-add SWIFT Profile increases transparency through unique, factual traffic activity report Complete & up-to-date SWIFT continuously verifies and validates the quality of the data 6 Global Reach of 7000+ banks active in correspondent banking, representing over 1 million relationships KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  7. 7. Collection of data and documents • Structured data • Supporting documents • Maintenance • Archiving and versioning Controls • Completeness, validity, accuracy Reporting and monitoring • Platform activity reporting and practices • Audit trail • Notifications of changes Value added services • SWIFT Profile 7 Inscope Outofscope KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public Name screening • List screening (PEP, blacklist checking) • Alert management or bad press Risk scoring • SWIFT proposed risk score • Communication on (non)-accepted counterparties Due Diligence • Around intermediaries Regulatory watch and market practices • Monitoring of legal/regulatory updates What will the SWIFT KYC Registry be in its first phase
  8. 8. 8KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public Registry Content & Controls • Comprehensive set of data • Directly provided by the source • Supports multiple languages • Electronic only • User-controlled • Fact-based and documented validation • Yearly revalidation of all information • Data quality ratings visible to all • No judgemental or opinion-making controls ContentControls
  9. 9. 9KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public Registry Content Structure Entity summary I. Identification of the Customer II. Ownership and Management Structure III. Type of Business and Client Base IV. Compliance Information V. Tax Information • e.g. Legal and Business Name, Registered Address, BIC Code • e.g. Banking License, Certificate of Incorporation • e.g. Form of Organisation, Beneficial Owners • e.g. Targeted Customers, Geographical Markets • e.g. USA Patriot Act Certification, Wolfsberg Questionnaire • e.g. FATCA status
  10. 10. Set of Proposed Controls 10 Data Documents Completeness Field is filled in and matches with the type of requested information Document • is uploaded under the right category • contains all required pages • is filled in (e.g. fields completed, questions answered and boxes ticked) Validity Input/reconfirmed less than 1 year ago • If expiry date: date should still be valid • If no expiry date: document uploaded/reconfirmed less than 1 year ago Accuracy Cross-check with supporting documents when available • Information contained in the document must match with data and across documents, e.g. name and address • Accuracy cross-checked with a trusted third party, e.g. banking license validity checked regulator’s website or listed company data validated with local exchange KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  11. 11. 11KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public Registry Features & Functionalities • Search and view counterparty summary • Request access to your counterparty’s data • Access your counterparty’s data • Watchlists and notifications upon update • Add and maintain your own KYC data • Grant and manage access to your data • Receive reporting and audit logs • Manage KYC users for your organisation Contribution &admin Consumption
  12. 12. 12 SWIFT Profile A standard traffic-based report to support your KYC KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  13. 13. 13KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public SWIFT Profile A new way to bring more transparency on your correspondents’ activities • Objective and factual, initially based on FIN traffic • Helps validate declared behaviour • Substantiates risk rating process • Different levels of granularity up to the level of nested correspondents • Optional and shared at bank’s discretion • Specific, transparent and unambiguous • Does not contain competitive information SWIFTProfile
  14. 14. 14KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public SWIFT Profile – Granularity SWIFT Profile Level 1 Does Bank A have correspondent banking activity with entities located in countries under close monitoring of the FATF? 0% <5% 5-20% >20% Direct (in/outbound flows) Indirect (originating/beneficiary country) 0% <5% 5-20% >20% All currencies US Dollar All except US Dollar Payments Trade Finance Country BIC Code Bank Name Turkey TRBATRIS Turkish Bank A TRBATRIS Turkish Bank B TRBATRIS Turkish Bank C TRBATRIS Turkish Bank D TRBATRIS Turkish Bank E TRBATRIS Turkish Bank F TRBATRIS Turkish Bank G TRBATRIS Turkish Bank H TRBATRIS Turkish Bank I Indonesia IDBAIDJX Indonesian Bank A IDBAIDJX Indonesian Bank B IDBAIDJX Indonesian Bank C IDBAIDJX Indonesian Bank D IDBAIDJX Indonesian Bank E IDBAIDJX Indonesian Bank F IDBAIDJX Indonesian Bank G IDBAIDJX Indonesian Bank H IDBAIDJX Indonesian Bank I Identities of Bank A’s nested correspondents per concerned jurisdiction: SWIFT Profile Level 3 – “Nested Correspondents” All currencies US Dollar All except US Dollar Payments Trade Finance SWIFT Profile Level 2 – “Nested Countries” Bank A’s correspondent banking traffic with concerned FATF jurisdictions. Share per country: All currencies US Dollar All except US Dollar Payments Trade Finance Direct (in/outbound flows) Indirect (originating/beneficiary country)
  15. 15. KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public 15 Optional split between US Dollar and other currencies No information on absolute value or volume of transactions i.e. only percentages Focus on correspondent banking with optional split between payments (cat. 1 & 2) and trade finance (cat. 4 & 7) Scope initially limited to FATF’s list of “High risk and non-cooperative jurisdictions” Level 1: Indication of the significance of the activity with FATF destinations expressed in three bands: 0-5%, 5-20%, >20% Level 2: Indication of the significance of the activity in each of the countries – destination flagged as Yellow (0-5%), Amber (5-20%) or Red (>20%) depending on its share in Bank A’s traffic exchanged with all of the FATF destinations Level 3: Identification of correspondents per concerned jurisdiction (e.g. BIC, Legal Name) Quarterly updates with optional reporting of delta and trend evolution Computed at the level of entity. Optionally also includes the entity’s subsidiary/branch activities Could cover both direct (in- and outbound flows) and indirect (originating/beneficiary country) exposure. SWIFT Profile – Content
  16. 16. 16 Community Engagement Advise, pilot and support the go-to-market KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  17. 17. 17 January ’14 • Formal announcement of the KYC Registry initiative • Start of KYC Working Group • Begin data collection with Working Group September ’14 • Open the Registry for data contribution by a number of selected banks December ’14 • Open the Registry for data contribution and consultation by all banks • Commercial launch of the Registry KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public Timeline The journey starts today Bootstrap Controlled ramp-up General availability
  18. 18. Bootstrap Strategy Leverage large banks network to reach to the broadest community 18 • Obtain a critical mass of information before launching the platform • Guarantee maximum reach quickly • Ensure continuous population and contribution of data • Enforce completeness, correctness and validity of the information Bootstrap KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public
  19. 19. 19 • Scope definition • End-to-end content and controls definition STREAM 1: Scope, content and controls • Extensive testing of tool features and functionality; workflows; design and user experience STREAM 2: Tool Piloting • Fostering the usage of the Registry by your correspondents and the broader community STREAM 3: Go-To-Market Support • Contributing KYC-related data and documents of your entities to the Registry STREAM 4: Data Contribution KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public KYC Registry Working Group 4 work streams
  20. 20. KYC Registry Working Group Participants 6 institutions engaged pro-actively with SWIFT 20KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public • Bank of America Merrill Lynch • Citi • Commerzbank • JPMorgan Chase • Société Générale • Standard Chartered • … 3 other MoU’s being currently discussed
  21. 21. 21SWIFT KYC Registry – 2014 – Confidentiality: Public Controlled Ramp-up • 10 to 20 banks (all segments) contributing with their data to the registry through the platform • Participate to the KYC Registry design validation stream, feeding the KYC Registry Working Group What? • Influence the KYC Registry design • Influence the data collection effort by on-boarding your counterparties • Get extra support from SWIFT for your own on-boarding • Lead by example towards your community and counterparties • Benefit from a early adopters discount on data consumption Why? • Register by end of June 2014 • Start populating with data between September and December 2014 When?
  22. 22. 22SWIFT KYC Registry – 2014 – Confidentiality: Public Controlled Ramp-up Next steps • SWIFT to invite customer to participate to the controlled ramp-up • Customer to confirm its participation • Customer and SWIFT to agree on scope of entities to be documented • SWIFT to provide a complete and detailed on-boarding pack that includes: – The service description – A step-by-step on-boarding document – A named contact for support • Customer to register to the KYC Registry platform and assign content manager users • Customer to upload data and document on the KYC Registry • SWIFT to monitor contribution and to perform controls on data • SWIFT and customer to jointly track progress and address issues • Customer to determine counterparties on-boarding priorities • Customer to send invitation to counterparties • SWIFT to follow-up on invitations How?
  23. 23. KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public 23
  24. 24. Thank you
  25. 25. Bart CLAEYS Head of Compliance Services - KYC bart.claeys@swift.com +32 2 655 34 50 Contact details 25KYC Registry – Benelux Forum – 20 March 2014 – Confidentiality: Public

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