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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. Its not my area, so I dont worry about it

C. its 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C. The data is incomplete and out-of-date a true challenge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 dont know the details

C. I dont know anything about itenlighten me!


The SWIFT KYC Registry
A community issue calling for a community
solution

Financial crime is top of All geographies / All types of


the agenda for banks players impacted

Significant costs ... Yet no competitive


at stake advantage for banks

Lots of duplication,
for universal challenges

6
Community-inspired financial crime
compliance solutions

Sanctions Sanctions The KYC Compliance


Screening Testing Registry Analytics
Hosted solution for Maximise the One global source Enhanced
cost-effective effectiveness and of KYC information understanding &
compliance with efficiency of your for correspondent management of
sanctions sanctions banking. financial crime-
regulations. environment. related risk.

All financial message Independent assurance Simple, secure, Unique, global dataset
formats that your sanctions standardised Interactive investigation
35+ global sanctions filters work correctly Supported by worlds tool
lists Greater control over largest correspondent Packaged reports
325 customers in 107 systems/processes banks Event-driven alerting
countries Peer benchmarking SWIFT Profile
17 central banks
Moving toward a Utility Vision
The KYC
Registry

Dedicated Sanctions
compliance unit list mngt
service Client/
Name
screening

2012 2013 2014 2015 SWIFT 2020

AML
Sanctions Screening Services
FATF 16
Sanctions Testing information
quality
Compliance
Analytics
Todays market: An unprecedented challenge
to comply with KYC requirements
The Cost of FI KYC is becoming prohibitive

Cumbersome, repetitive
Increase in pressure to
reconcile & de-risk and inefficient bilateral
exchanges
KYC
Increase in AML/KYC fines
(>$3 billion/2 years) Complex and Utility
inconsistent requirements
Increase in KYC complexity: across jurisdictions
FATF/FATCA
Unavailable and poor
quality of information

As a result the industry has witnessed a new development: the growth of the KYC utility
The KYC Registry: Single source of directly
sourced, validated KYC data for
correspondent banking

1 2 3 4 5
Standard Feature-rich Validated Unique Community-led
data set platform data content

Customer ID Secure Comprehensive CDD data* 7000+ correspondent


Customer base Workflow tools Fact-based EDD data* banks use SWIFT
Ownership Notifications Ex-industry SWIFT 1.3M+ connections
Management Easy to use professionals Profile for SWIFT National
Compliance /AML Export/ Report Multiple quality KYCC* Commnunities
FATCA checks of data and Development banks
95+ data points documents Working Group
30 Documents

* CDD = Customer Due Diligence


* EDD = Enhanced Due Diligence
* KYCC = Know your customers 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, certified 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
The KYC Registry platform: feature-rich to improve cost-efficiency and
effectiveness in managing your KYC data

User-controlled access
Portfolio & task management
Export, report and audit
User-to-user communication
The SWIFT Profile: unique (KYCC) content
What you get
Aggregate view of incoming and outgoing high-risk payments, traffic analysed by volume and amount

What it does
Provides transparency about a banks 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 banks true payments activity, providing hard data to substantiate declared behaviour

COUNTRY OF YOUR CORRESPONDENTS COUNTRY OF


YOUR COUNTERPARTY ORDERING / BENEFICIARY PARTYS BANK
YOU CORRESPONDENT

CONSUMER OF THE SWIFT PROFILE PUBLISHER OF THE SWIFT PROFILE YOUR CORRESPONDENTS YOUR CORRESPONDENTS
DIRECT EXPOSURE INDIRECT EXPOSURE
KYC Registry
14 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 dont plan to participate


Thank you