The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Beneficial Ownership Data Adds Complexity to Compliant Client Onboarding

Client onboarding and Know Your Customer (KYC) processes continue to be pain points for many banks, but the story does not end here, with increasing regulatory requirements raising additional challenges around beneficial ownership data.

The problem of integrating beneficial ownership data with client onboarding and KYC systems was addressed during a recent A-Team Group webinar. The webinar was moderated by A-Team editor Sarah Underwood and joined by Ben Marsh, CEO at iMeta Technologies; Anders Rodenberg, director of sales at Bureau van Dijk; and Kelvin Dickenson, vice president of compliance solutions at Alacra.

To set the scene for discussion, webinar participants answered a poll question about how well the process of client onboarding is working within their organisations. Just 17% said the process is working very well. The same percentage said the process needs significant improvement, while 39% said the process is working but needs some improvement, 22% said the process is being reviewed for change, and 4% said they are implementing the process.

The webinar speakers agreed that there is still room for improvement in onboarding systems, and noted outstanding challenges including difficulties in sourcing necessary data and a lack of integration between siloed systems, and the need to automate connectivity to external data and implement flexible operating models and tools to accommodate regulatory change.

Moving on to consider the integration of beneficial ownership data with existing onboarding and KYC systems, a second poll questioned the extent to which organisations have achieved this. Just 8% said integration is complete, 42% said integration is nearly complete, and 12% said they had not yet started integration, leaving this latter group missing out on the significant operational benefits of integration noted by 50% of webinar participants in a third poll.

The speakers discussed how different jurisdictions and regulations have different requirements in terms of the percentage holding of an entity at and above which beneficial ownership data must be provided. They also talked about commonalities that can support compliance, including the need to automate collection and validation of external beneficial ownership data, ensure data can be rolled up to understand credit risk, and manage ongoing challenges presented by constant changes in beneficial ownership.

While compliance with local onboarding and KYC rules is not optional, improving processes and successfully integrating beneficial ownership data can help banks improve the customer experience, reduce time to revenue and cut operational costs. But that is still not the end of the story, with speakers suggesting regulatory enforcement will get tougher and requirements for transparent beneficial ownership data will get more rigorous.

Listen to the webinar to find out about:

  • Outstanding challenges of KYC and client onboarding
  • Requirements for beneficial ownership data
  • Sourcing and integrating the data
  • Sustaining successful onboarding
  • Operational and business benefits

Related content

WEBINAR

Recorded Webinar: Adverse media screening – how to cut exposure to criminal activity, from money laundering to human trafficking

Screening for adverse media coverage of counterparties presents an incredible opportunity for financial institutions to limit risk exposures and identify bad actors early. It is required by regulations such as the EU’s sixth Anti-Money Laundering Directive (AML 6), and is one of the most effective ways to steer clear of potential connections with sanctioned activity...

BLOG

Rising AML Costs Driven by Regulatory Initiatives Rather than Crime Threat, LexisNexis Survey Finds

Regulation itself is the primary driver behind an expected rise to £30 billion in UK financial institutions’ annual AML costs to £30 billion by 2023, a survey from LexisNexis Risk Solutions has found. The increase, from £28.7 billion in 2020, appears set to be invested in personnel rather than technology, however, with the survey –...

EVENT

RegTech Summit London

Now in its 6th year, the RegTech Summit in London explores how the European financial services industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...