SWIFT On Compliance

Luc Meurant, Head of Banking Markets and Compliance at SWIFT

Polling Question #1

What is the level of difficulty for your bank to obtain KYC-related information from your counterparties/correspondents?

A. Not difficult at all – we have a clear process in place and our correspondents always provide the information we need

B. It’s not my area, so I don’t worry about it

C. it’s one of the most challenging aspects of being a correspondent bank

Polling Question #2

How satisfied are you with the quality of KYC-related data that your firm has?

A. The data quality is superb – we have all of the details we need and we receive them on a timely basis

B. The data could use some work, however we are making progress

C. The data is incomplete and out-of-date – a true challenge

Polling Question #3

Are you aware of the SWIFT KYC Registry?

A. Yes, fully aware and understand all aspects of the initiative

B. I have heard about it but don’t know the details

C. I don’t know anything about it…enlighten me!

The SWIFT KYC Registry

6

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

Community-inspired financial crime

compliance solutions

Sanctions

Screening

Hosted solution for

cost-effective

compliance with

sanctions

regulations.

All financial message

formats

35+ global sanctions

lists

325 customers in 107

countries

17 central banks

Sanctions

Testing

Maximise the

effectiveness and

efficiency of your

sanctions

environment.

Independent assurance

that your sanctions

filters work correctly

Greater control over

systems/processes

Peer benchmarking

The KYC

Registry

One global source

of KYC information

for correspondent

banking.

Simple, secure,

standardised

Supported by world’s

largest correspondent

banks

SWIFT Profile

Compliance

Analytics

Enhanced

understanding &

management of

financial crime-

related risk.

Unique, global dataset

Interactive investigation

tool

Packaged reports

Event-driven alerting

2013

Dedicated

compliance unit

2014

Compliance

Analytics

2015

The KYC

Registry

Sanctions list mngt service

FATF 16 information

quality

Client/ Name

screening

AML Services

SWIFT 2020 2012

Sanctions Screening

Sanctions Testing

Moving toward a Utility Vision

Today’s market: An unprecedented challenge

to comply with KYC requirements

KYC Utility Complex and

inconsistent requirements

across jurisdictions

Cumbersome, repetitive

and inefficient bilateral

exchanges

Unavailable and poor

quality of information

Increase in pressure to reconcile & ‘de-risk’

Increase in AML/KYC fines (>$3 billion/2 years)

Increase in KYC complexity: FATF/FATCA

The Cost of FI KYC is becoming prohibitive

As a result the industry has witnessed a new development: the growth of the KYC ‘utility ’

Customer ID

Customer base

Ownership

Management

Compliance /AML

FATCA

95+ data points

30 Documents

Secure

Workflow tools

Notifications

Easy to use

Export/ Report

Comprehensive

Fact-based

Ex-industry

professionals

Multiple quality

checks of data and

documents

CDD data*

EDD data*

SWIFT

Profile for

‘KYCC’*

7000+ correspondent

banks use SWIFT

1.3M+ connections

SWIFT National

Commnunities

Development banks

Working Group

The KYC Registry: Single source of directly

sourced, validated KYC data for

correspondent banking

1 Standard

data set

2 Feature-rich

platform

3 Validated

data

4 Unique

content

5 Community-led

* CDD = Customer Due Diligence * EDD = Enhanced Due Diligence * KYCC = Know your customer’s customer

A standard set of KYC data

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 UBO and shareholders >10%: full names and identifying data

Board of Directors Lists: full names and identifying data

Group structure

Annual Reports, Shareholder listings, certif ied group and organisational charts

Category III – Type of business and client base Revenue breakdow n 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,FA TCA information & proof of registration, documentation

Manage, collect and share your KYC data in

a single place

User-controlled access Portfolio & task management Export, report and audit User-to-user communication

The KYC Registry platform: feature-rich to improve cost-efficiency and

effectiveness in managing your KYC data

The SWIFT Profile: unique (KYCC) content

What it does

Provides transparency about a bank’s SWIFT network traffic by indicating payments to/from countries that are

considered to be high-risk by FATF or are under EU or OFAC sanctions

Key benefits

Unique insights into a bank’s true payments activity, providing hard data to substantiate declared behaviour

What you get

Aggregate view of incoming and outgoing high-risk payments, traffic analysed by volume and amount

YOUR CORRESPONDENT

COUNTRY OF YOUR CORRESPONDENT’S COUNTERPARTY

YOUR CORRESPONDENT’S DIRECT EXPOSURE

YOUR CORRESPONDENT’S INDIRECT EXPOSURE

PUBLISHER OF THE SWIFT PROFILE CONSUMER OF THE SWIFT PROFILE

YOU

COUNTRY OF ORDERING / BENEFICIARY PARTY’S BANK

KYC Registry14 Apr 2015

358 entities

in 109 countries

Polling Question #4

…So, are you ready to embark on your journey to the KYC Registry?

A. Yes, sign me up today!

B. We plan to implement in the next 3-6 months

C. This is a project for 2016

D. We don’t plan to participate

Thank you