Luxembourg
02 March 2017
Reporter: Stephanie Palmer

ITAS: More fintech required for KYC


Financial services providers should make better use of financial technology to help manage their know-your-client (KYC) and anti-money laundering (AML) requirements, heard attendees of ITAS Luxembourg.

Gerard Green, head of EMEA AML at Invesco Asset Management, noted that public outcry in recent times on tax avoidance schemes rightfully calls for greater transparency in KYC and beneficial ownership in the financial services industry.

While the EU Fourth AML Directive allows for appointed intermediaries to perform due diligence on the underlying investor, Green noted that omnibus accounts may one day become obsolete with the advent of fintech and blockchain. This will however require an industry overhaul in technology.

“We need to have these systems to allow that transparency,” he said, while remaining within the realms of data protection laws and allowing for better sharing and centralisation of KYC data."

In order to do this, systems will need to be updated to provide more transparency, while remaining within the realms of data protection laws and allowing for better sharing and centralisation of KYC data.

Green said: “We need to have these systems to allow that transparency.”

Another speaker, Stephen Smyth of J.P. Morgan, also suggested that depositories also have to have a view of everything an asset manager does, and everything it outsources. He added: “Regulation, automation and fintech go hand in hand for me.”

Green also suggested that, currently, data protection and KYC and AML rules can be conflicting, noting that distributors will not simply hand over underlying investors’ data when they’re asked for it. However, he argued that, if another institution requires a client’s data for AML and KYC purposes, the data should be handed over, in a way that protects investors “without conflicting” with transparency.

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