Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016 - (Page 8)

INTERVIEW LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE - N°93 - APR / MAY / JUNE 2016 With David Blair HOW SHOULD WE SET UP AN EFFICIENT KYC PROCESS? KYC process has become more complex over years. How would you describe the situation? KYC is a critical element of the global efforts to strengthen anti money laundering (AML), with a view to limiting the ability of criminals, terrorists and other sanctioned entities to move funds. These efforts are most felt in financial services but also affect telecoms and some non-financial asset classes, and in many jurisdictions commercial companies as well. Regulators are wary of KYC becoming a box ticking exercise. So they generally make banks liable for knowing their customers and customers' customers (aka KYCC) without specifying what they consider to be adequate due process for KYC. Since this liability has amounted to USD billions in fines for banks over the last few years, banks are understandably anxious. Anxiety breeds over kill as banks try their best to demonstrate bona fides that can stand up in court (or more realistically in secret plea bargains with regulators). The compliance departments of different banks are showing surprising creativity in trying to manage KYC and AML liability. (Many corporates wish some of that creativity could be diverted from compliance (and spurious financial engineering) into value adding services for the real economy.) So corporates end up facing fragmented and often byzantine KYC requirements from different banks, and even from different geographies and functions within each bank. No one could contest the benefits of stronger KYC processing. For example in terms of fight against fraud and money laundering. Don't you agree? Corporates respect the authorities' need for KYC and ALM, andhave nothing to hide. We would just like to see the needs met in an efficient manner. 8 Regulators are wary of KYC becoming a box ticking exercise. So they generally make banks liable for knowing their customers and customers' customers (aka KYCC) without specifying what they consider to be adequate due process for KYC Corporate treasurers are disappointed by the absence of KYC standardisation worldwide. Do you foresee any possible solution we could all set up in order to simplify this administration burden? Absolutely. I see almost ten solutions. Fewer would be better but at least there are solutions out there. Ideally SWIFT would lead the way, but they are focussed on inter FI KYC for now. So corporates are joining some of the other KYC registers - especially KYC.com and Thompson Reuters. Do you think a world register of KYC's could be envisaged? Why repeating exercises where we could have a global register with each one's KYC form? I had thought the global LEI scheme might provide a basis for global KYC, but that does not seem to be shaping up fast enough. More realistically, governments - in the form of tax authorities and / or company registries - might logically do this at a national level; I think KYC registries are natural monopolies, but the authorities do not seem to agree. So I currently think the most realistic best bet is for large corporates to agree amongst themselves about the suitable content and then execute on a couple of the most viable platforms that are accessible to us. It is analogous to how we can use ISO20022 pain to execute payments through diverse market infrastructures around the world. Do you think eBAM format could be used for transferring KYC information? I think we need standards, preferably from ISO20022. I expect the current eBAM standards may need to be extended. http://www.KYC.com

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016

Cover
Table of contents
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW David Blair - How should we set up an efficient KYC Process?
FOCUS
IFRS 9: Hedging - Treasurers will love it
From 17 to 16 reLEASE of the new LEASE accounting standard
Block chain - Is this buzz word turning into a reality?
Bank Single Gateway, the Plumbing of Bank Connectivity
FORUM
Geopolitical threats for the year ahead
Treasurers proceed with caution
Des difficultés en série pour les nouveaux entrants
Easing the Burden - Is a global KYC standard needed?
European trade repository of the year
La dette senior Européenne, un regard nouveau sur l'obligataire
CORPORATE FINANCE
Stay connected with cloud treasury technology
From stone age to straight through processing
Differentiators for treasury management systems
Complete securities financing solutions for corporates
A full and balanced "meal" for your retirement?
15 MINUTES WITH FinMetrics
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS

Trésorier/Treasurer magazine - N°93 - Apr/May/Jun 2016