SWIFT and Major Banks Pool Resources on KYC Registry

Financial messaging services provider SWIFT has signed a memorandum of understanding (MOU) with a group of major banks to jointly develop and use SWIFT’s know your customer (KYC) registry, a centralised utility for the collection and distribution of standard information required by banks as part of their due diligence processes.

The group, which includes Bank of America Merrill Lynch (BofA Merrill), Citi, Commerzbank, JPMorgan, Société Générale and Standard Chartered, will work with SWIFT to build a service to help banks manage their compliance challenges and reduce the high costs associated with implementing KYC-related regulations. SWIFT will operate the KYC registry as an industry-wide utility with an initial focus on correspondent banking relationships.

The banks will participate in a SWIFT-led working group to agree the Registry’s processes as well as the documentation and information necessary to fulfil KYC requirements across multiple jurisdictions. In addition, the banks will start populating the registry with their own KYC data.

“We welcome the close cooperation of these leading banks as we develop the KYC Registry,” said Luc Meurant, head of banking markets and compliance services, SWIFT. “The banks’ involvement is an important step in this initiative to standardise the process and reduce the cost associated with KYC activities. The commitment from these banks demonstrates the importance of collaboration in financial crime compliance. Every SWIFT user will be able to benefit from our community-based solutions.”

SWIFT said that over coming months, more banks are expected to join the registry and contribute their own up-to-date information for secure, centralised storage. Each user will have a standardised access point to obtain details on their counterparties, while retaining ownership of their own information and control over which institutions can view it.

“By providing a central, standardised utility solution replacing bilateral document exchanges between each set of counterparties, SWIFT is helping to reduce the cost, and risk associated with KYC compliance,” said Javier Pérez-Tasso, chief marketing officer, SWIFT. “It is encouraging to see the banks coming together around this initiative, which clearly demonstrates the value community-based solutions can bring to this challenge.”

The registry is expected to go live at the end of the year, with a controlled ramp-up planned for this summer.

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