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Treasury

KYC reform catches up with tech evolution

As correspondent banking becomes fraught with issues, but remains a central aspect of business, the industry is seeing an overhaul of its guidelines to ensure high standards of due diligence while still allowing business to flow.

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The update of the Wolfsberg questionnaire on due diligence has been expanded to take into account changes in expectations in correspondent banking.

The Wolfsberg group, comprising 13 of the world’s biggest banks – including Bank of America, Credit Suisse and Société Générale – announced it was to release an updated versions of its due-diligence questionnaire (DDQ) at the end of 2017.

As well as including additional questions, the group wanted to remove any ambiguity about what it is asking for and which institutions need to supply it.

However, after further interaction with its customers, the group has now decided to withhold the release of the DDQ until later this month, when it has completed additional materials, such as a publication and completion guidance. It is also adding a glossary to ensure all parties have the same understanding and remove incorrect interpretations.

Notable changes

There was a consensus across the industry that there had been notable changes in the decade since the questionnaire was first drawn up.

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Guy Harrison,
IHS Markit

Guy Harrison, managing director and head of KYC (know your customer) services at IHS Markit, says the group was involved with the Committee on Payments and Markets Infrastructures, and Financial Stability Board working group on the draft stages of the questionnaire.

Harrison says the changes will mean some institutions having to look into new ways of working.

“The new version will require more work from the providers and the respondents,” he says. “The added questions will raise standards, but ultimately mean more work. There are ways to help by centralizing and streamlining.


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