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The importance of KYC to corporate treasurers

Editorial Team


Anna Mazzone, Global Head of Risk Solutions, Thomson Reuters explains how KYC managed services deliver value to corporate treasurers as well as banks.

Many corporate treasurers will remember the ‘old days’ of KYC, when banks’ requests for documents were fairly simple. The game-changing events of 9/11 and the financial crisis of 2008, however, have resulted in increased regulations and the metamorphosis of KYC. The threat of hefty fines and, more importantly, reputational damage have seen banks focus on KYC compliance with renewed vigour.

Banks and corporate treasurers – same problem, different perspective

Where does this leave corporate treasurers? The KYC checks performed are now extensive, with additional checks for additional services. The number of documents required is increasing exponentially and moreover, requests vary by bank and by geography. With no ‘standard’, it is difficult for treasurers to predict exactly what information will be required. On top of this, client on-boarding can take up to 34 weeks, significantly disrupting the revenue generating activities of the organization.

Then there are the very real concerns over data security and privacy. Sensitive documentation requested by banks can and does get lost leading to a further waste of valuable time, with treasurers having to check that documents have arrived.

But let us not forget that banks also face challenges, including fines; operational, staff and IT costs; lost revenue due to customer attrition; and the threat of reputational damage if they fail in their KYC due diligence. Mired in their own problems, many banks do not view KYC from a client perspective at all. But KYC is not just a bank problem! End-clients are affected too.

Innovation to the rescue

As a former banker, I can understand the challenges the banks are facing, but I can also see that we need to improve the client experience. KYC managed services like KYC as a Service are adding enormous value in this space by enabling the quick and easy exchange of documents and client identity information via a secure web-based portal. Sensitive information is uploaded and can then be distributed to selected and approved financial institutions only, giving treasurers full visibility and control over who can access and view their information. Information can simultaneously be shared with multiple banks, rather than having to send individual sets of documents to each bank. The time savings are self-evident and duplication of effort is virtually eliminated. Moreover, information is securely stored and delivery is guaranteed.

KYC address concerns around information security

KYC managed service providers also address treasurers’ crucial concerns around information security. Thomson Reuters’ KYC as a Service, for example, has successfully been audited by PWC against the ISAE 3000 assurance standard, which covers information security. The service stores information in two ISO 27001 data centers in London, which are subject to European data privacy laws – the strongest such laws in the world.

Embracing the future

Looking ahead, it is no secret that compliance requirements, especially around tax, are only going to become more onerous. More and more strictly confidential information will need to be exchanged globally. As the first KYC managed service on the market, KYC as a Customer has transformed the old ‘many-to-many’ model to the new ‘one-to-many’ model through a secure web-based portal. This is a perfect example of how innovation can streamline KYC processes, save treasurers time and ultimately save the organization money.

About Anna Mazzone

Anna has built the KYC Managed Services for Thomson Reuters and has transformed how the firm thinks about business innovation. Anna has a natural passion for and dedication to innovation, product development, and customer engagement during her 25 years in the financial service industry.

Anna started her career as a banker with Bank of America in San Francisco and Los Angeles holding positions in private banking, commercial real estate liquidation, and capital markets. She joined Thomson Reuters in the 1990’s, working in the Governance Risk and Compliance Division. Prior to that, she was recruited by Markit to support a consortium of banks to launch BOAT, a MiFID based equity trade reporting solution.

Anna has been shortlisted for the Women in Business and Finance Achievement Award in London.