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Digital KYC: At the Top of the Treasury’s Wish List?

  • By Andrew Deichler
  • Published: 2/11/2016

kyccompLONDON -- Thursday morning at the ACT Cash Management Conference, Phil John, EMEA treasury director for Mars Nederland, provided a list of “wishes” treasurers want from their banking partners. One wish in particular would be a big help to many of AFP’s treasury members—digital KYC.

John said that while he understands collecting know-you-customer (KYC) information is a “nightmare” for both corporate and banks, “I don’t think it needs to be quite the nightmare that it is.”

He explained that just a week ago, one of his banking partners in Dubai requested signatures and requested that Mars’ signatories come to Dubai to sign. “I said, ‘Yeah, we’d love to! Where are you going to put us up,’” he asked in jest. “So I challenged the bank because we had a meeting with the relationship manager. We got him to effectively become the notary public and witness our signatures. They said that’s fine. Well if it’s fine, why did you ask me to go to Dubai in the first place?”

Mars wants to be compliant, John stressed, but the documentation is just too much. “We opened two accounts in Saudi Arabia, and they wanted 18 documents signed,” he said. “After some pressure, we got it down to 11. But in the end, I still signed more than 18 documents over a space of six to nine months.”

According to data from Thomson Reuters , corporates paid more than £173 billion in fines from 2008 to 2013. Furthermore, corporates are regularly required to submit between five and 100 documents during a lengthy onboarding process that can take up to 34 weeks.

John stressed that regulators, banks and corporates need to come together to address KYC. “I don’t know if any of you have been involved in doing that, but it strikes me as perhaps the way forward,” he said.

He favors moving to a digital system for collecting KYC, similar to SWIFT’s KYC registry , only for corporates instead of banks. “I’d love to have a universal profile owned by the banks, but even better, my dream is that we would own it electronically and in a very secure way,” he said. “We’d only make available the piece that you needed to see. We’d store it once and just share. We’d not have to send things by paper.”
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