Following Thomson Reuters agreement to acquire Clarient and Avox from DTCC, we caught up with Steve Pulley, managing director of Risk Managed Services at Thomson Reuters, to find out more about the company’s plans for the acquisitions and how they will be integrated with Thomson Reuters risk management, compliance and reference data solutions.
Pulley describes the acquisitions as a ‘growth play’ and says Thomson Reuters will continue to invest in them and its three-year-old Org ID Know Your Customer (KYC) managed services. He says: “Thomson Reuters has always wanted to establish itself as a leader in this space, it is a core investment area for us. We will fully integrate Clarient and Avox into the Thomson Reuters estate and will do it this year.”
The integration will form a pyramid product structure with Thomson Reuters enhanced due diligence service at the top of the pyramid. The next layer will be the company’s Org ID KYC service, which includes a team collecting data directly from customers to fill KYC records. Below this will be public KYC records, an integration of records from Org ID and the Clarient Entity Hub PKYC service that supports and maintains records based on two million legal entities held by Avox. The bottom layer of the pyramid will integrate Thomson Reuters reference data service and Avox legal entity data.
Pulley says the outcome of the integration will be one technology stack and one set of cohesive solutions. Thomson Reuters customers will get greater depth and content in the legal entity and KYC space, while Avox customers will get more of the same, with Thomson Reuters integrating five million legal entities with the Avox database. The plan for Clarient is to add more features and functionality to its services, and extend the marketing focus for the Entity Hub’s KYC services beyond London and New York to all major markets. This is intended to give global clients a KYC service across markets.
The expansion of Org ID is expected to create critical mass on the platform and round out Thomson Reuters offering in the US – the platform is already pretty strong in EMEA. The plans for Clarient provide a big step forward in response to requests from bank owners and users of the utility that Thomson Reuters acquire the business and develop it within its KYC environment. Pulley comments: “All the banks behind Clarient are coming over and will be long-term customers of Thomson Reuters.”
Thomson Reuters is reluctant to talk about customer numbers, but the acquisitions will certainly strengthen its base of 24 Org ID customers with at least the six Tier 1 banks behind Clarient and a large customer base at Avox that has been built up over the company’s 15-year history.
Pulley says: “This will be a big business with many hundreds of customers. It is an enormous market opportunity for Thomson Reuters. We want to serve Tier 1, 2 and 3 financial services firms globally.”
In terms of people, Thomson Reuters will take on Avox and Clarient’s 450 staff, bringing the total number of people in Thomson Reuters Risk Managed Services division to about 1,300 on a global basis.
As DTCC bows out of the KYC market, Pulley concludes: “Thomson Reuters doesn’t expect to make more acquisitions in this space as we now have a complete and holistic set of capabilities and a strong franchise across the globe.”