In an effort to streamline client onboarding across financial markets, the enterprise data provider Markit and the business processing technology firm Genpact announced the launch of Markit | Genpact KYC Services, a centralized know-your-customer (KYC) data management service.
The service has been in development since September, when HSBC, Morgan Stanley, Citi, and Deutsche Bank announced they would work together to create and maintain a global standard for KYC document management. Hundreds of man hours later, they have built standards for the document collection process and idenitified the kinds of information needed for high-quality KYC procedures. The service will go live in July, initially covering onboarding of clients with jurisdictions in the UK and US.
Client onboarding is increasingly subject to regulation, raising the compliance costs for financial firms. Constant, careful review of clients' backgrounds, counterparts, and jurisdictions means banks are dealing with duplicate data requests from industry participants with a variety of standards. It's a sore point in this environment, where banks are trying to decrease costs and eliminate functions that do not give a competitive advantage.
Markit | Genpact KYC Services will serve as a centralized and standardized data portal. The service will "collect, enrich and centrally administer legal entity data and documents that banks require from their clients in order to conduct business and comply with KYC and anti-money laundering regulations, including Dodd-Frank, Emir, Fatca and Mifid," Markit and Genpact said in a press release. The service will actively monitor client information and reach out to firms for updated information.
"We see a lot of moves that we think lead to a more fundamental shift in the way people source services from banks, and we see this as one of the core services," Michele Trogni, managing director and global head of managed services at Markit, told us. "Client reference data management -- really knowing your customer and doing appropriate checks around who you're actually dealing with -- this is a core building block of capital markets."
Banks are also beginning to acknowledge that KYC can be a differentiator, but the process around collecting and curating details is expensive and repetitive, Trogni said. They needed a higher-quality, lower-cost, and lower-risk way to get the information to market quicker.
"It's one thing to create a standard around which data is required, but we also bring infrastructure, people, and process to do that in a coherent way. Now each of the departments that want to use that data to, for example, assess credit lines are all working off consistent data."
The online portal KYC.com is now open for institutions (including asset managers, corporations, and hedge funds) to register for the service.Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio