Sibos and the KYC Agenda

The agenda for this year's Sibos conference taking place in Singapore on October 12–15 contains plenty of informational sessions about the ISO 20022 messaging standard, intended to spur attendees and their firms to see the benefits of upgrading from its forerunner, ISO 15022, and provide guidance on how to accomplish the shift.

In a column around this time last year that preceded Sibos 2014, I observed that the agenda was focused on ISO 20022 as well, although more in terms of trying to gage progress in migrating users to the standard. In crafting this year's agenda, Swift (the financial industry messaging standards cooperative that organizes Sibos) appears to be less worried about the need to campaign or push for ISO 20022 adoption, and confident enough to just make resources available through the sessions.

That clears the way for other concerns that Swift can advance, as covered in this issue of Inside Reference Data. The greatest of these is now know-your-customer (KYC) data, as Swift's Bart Claeys tells us and Luc Meurant discusses in a progress report feature in this issue.

Although Swift's KYC Registry, and a few other providers' KYC offerings, have been available for about a year or more, a "continuously evolving" regulatory landscape will affect how KYC processes are done, necessitating changes and updates, says Claeys.

Even though Thomson Reuters, Clarient and Markit|Genpact are also all in the KYC space now, Swift is still striving to standardize KYC information on its own, as Meurant, head of banking markets and compliance services at the cooperative, asserts.

Executives from firms that consume data, such as Tatjana Dobrovolny of Raiffeisen Bank and Amy Harkins of BNY Mellon, outline the need for data quality amid all the different KYC data standards, which vary depending on who is providing the data and the different rules that are in force in whatever market that data is coming from. This raises questions about whether the industry can truly manage KYC data effectively to meet regulatory compliance imperatives.

The industry's other concern about KYC is whether the service providers' offerings are indeed delivering efficiency gains and cost savings in the process of better managing KYC data. Similarly, data quality is a concern for reference data management overall.

The insights shared by service providers and data users in this story point to the definition of data needs as an important key to providing quality. As BMO Financial Group's Adrian Dokmecian says, "[Our users] need to understand what that data is. Only then can we measure accordingly, provide them with some insight on the quality of that data ... then go through the quality lifecycle and look at remediation."

Applying this assertion to KYC data, with all of its varied and changing characteristics, one would have to conclude that the definition of KYC data has to become more standardized if it is to eventually yield the progress that the industry is trying to achieve.