BST Awards 2020: Best buy-side compliance product, KYC—SIX

Due to the global footprint many financial institutions share, it can be difficult to know whether they’re operating within sanctions restrictions or breaching them. Failure to comply while building investment portfolios and allocating investments can lead to potential fines, reputational damage, and even loss of licenses to transact.

Oliver Bodmer, a senior product manager at SIX, says that knowing your customer is becoming more difficult, especially when there are so many KYC and onboarding providers to choose from.

But, for the second year in a row, users trust SIX, which takes home a win for the best buy-side KYC compliance product. SIX’s Sanctioned Securities Monitoring Service (SSMS), which has gained 23 new clients this year, aims to simplify KYC processes with human-readable files, automatic daily updates, and suspicious activity alerts.

The SSMS monitors over 8 million active securities, 220 million private companies, 65,000 public companies, and 152 million director/shareholder contacts, which equates to 26,250 changes analyzed weekly, and 1.8 million shareholder relations.

The SSMS provides customers with an easy-to-digest daily list of issuers and securities linked to the domiciles, companies, and individuals sanctioned by the UN, EU, US, UK, Australia, Canada, Switzerland, Singapore, and the Hong Kong Sanctions Regime. The list eliminates the need to source, scrub and map data while minimizing the risk of large fines and reputational damage.

As for future enhancements, Bodmer says graph technology can be particularly helpful in KYC tasks, and the team at SIX is looking into its use-cases. The vendor has enlisted the help of a partner firm, which is providing SIX with a graph technology database meant to detect controlling relationships in companies.

Graph databases can connect ownership trees, on top of which which SIX can then run advanced mathematics or Python analysis and detect cases of ownership percentages that may ordinarily slip past the US 50% rule, a regulation that prevents a sanction-listed individual from owning more than 50% of a company.