Know-your-client (KYC) requirements pose a major challenge for clients opening accounts with transfer agents, and the only way to manage this challenge is through a common solution on which the industry cannot seem to agree.
In a discussion at ITAS Luxembourg, an audience member suggested that the biggest challenge in working with transfer agents is KYC, and asked why there is not more talk about automation in this area.
Graeme Whyte, global head of transfer agency services at BlackRock, conceded: “It is a big challenge, and if we could solve it, it would be a real win.”
Vanessa Roger Grüneklee, global head of distribution support and client operations at AXA Investment Managers, said this will only be possible with a “single common solution”. If there are too many providers, “we won’t solve the problem and it will be a nightmare for the distributor”, she said.
A third panellist, SWIFT’s Tanja Van Sterthem, highlighted the SWIFT KYC Registry platform, which, while originally opened up to the correspondent banking space, is now also open to custodians and fund distributors.
On SWIFT’s platform, institutions contribute an agreed ‘baseline' set of data and documentation for validation, which the contributors can then share with their counterparties. Each bank retains ownership of its own information, as well as control over which other institutions can view it.
Another audience member responded with the argument that SWIFT’s solution remains one of many competing products. While the concept is good, adoption is still an issue, he said, adding in frustrated tones: “Nobody can agree which is the right solution.”
