• Industry Challenge Compliance

Developing CDD and EDD solutions to complement SWIFT’s global KYC Registry

Financial crime compliance is a major focus – and cost – for the financial industry. The collection and analysis of customer data and related decision-making are essential parts of the compliance process. Customer Due Diligence (CDD), Enhanced Due Diligence (EDD) and Know Your Customer (KYC) processes require massive effort, much of it manual. Innovation, collaboration and standardisation are keys to cost reduction and efficiency gains in these areas. The correspondent banking industry strongly supporting utility solutions that increase effectiveness and efficiency, eliminate manual processes, and provide for global standards and processes where possible.

SWIFT established The KYC Registry to provide a standardised set of data and documentation that correspondent banks and funds players need to perform KYC compliance on their fellow institutions. Nearly 2,500 institutions have joined the Registry since December 2014. Now, SWIFT is building on this success by developing an industry ‘marketplace’ of complementary solutions developed internally and with external partners. These could include CDD and EDD solutions such as risk assessment, data aggregation, account opening and digital passport services. To accelerate marketplace development, Innotribe and SWIFT will run a two-part event in July 2016 in London:

  • A one-day Marketplace challenge on 4 July 2016 will invite established vendors to pitch prototypes and proofs of concept that could be developed and acquired by SWIFT, or marketed by the vendor itself through The KYC Registry marketplace. Participation in this challenge gives vendors direct contact with SWIFT’s compliance services management team and major banks, as well as the potential to reach more than 7,000 correspondent banks that make up SWIFT’s community
  • A two-day New Product Development challenge on 6-7 July 2016 will give early-stage startups with strong technology or beta products an opportunity to pitch and fine-tune their ideas through a collaborative workshop with SWIFT’s compliance management team and major banks. At the end of the two days, up to 3 startups will be selected for a three-month engagement period to further develop their concept in collaboration with Innotribe and SWIFT. Participation in this challenge gives startups the opportunity to benefit from up to $100,000 in smart funding, coaching from FinTech experts, as well as direct contact with SWIFT member institutions and SWIFT’s compliance services management team

Both challenges will give innovators access to collaborative development and coaching, thousands of potential customers, as well as the ability to leverage the standard, global data stack of know your customer information in The KYC Registry. Applications are open and will close on 18 June 2016.

Please note that applications for both of these workshops has now closed.

Customer Due Diligence (CDD) involves verifying the customer’s identity and assessing (potential) risks associated with them based on such factors as their jurisdiction, business activities, customer base, management team/structure and more. CDD includes collecting documentation (audited reports, proofs of regulation, lists of directors…) from the customer or other sources. This process helps banks to identify potentially suspicious activities if these occur.

Enhanced Due Diligence (EDD) involves additional due diligence procedures for customers that are deemed to be higher-risk due to their location, business activities, customer base or other factors. EDD often includes interviewing, monitoring and reporting activities. It can involve collecting additional proof points, third-party EDD reporting, obtaining an understanding of internal policies and procedures, and suspicious activity monitoring systems.

KYC-infographic

For more information about SWIFT’s financial crime compliance services, visit the SWIFT website.

For more background on the Industry Challenge on Compliance download our information pack

For more information on the Challenge itself, including details of the process, download our application information pack