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Foreign Exchange

Technology vendors eye FX client onboarding opportunity

Regulatory technology vendors are relishing the prospect of helping banks minimize FX client onboarding errors, but in a world where legacy systems remain commonplace, regtech is not always an easy sell.

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Anti-money laundering (AML) and know-your-customer (KYC) regulations require financial institutions to carry out due diligence on their customers. Verifying the identity of these customers is a crucial step in this process and screening names against AML watchlists helps ensure that potential customers have not been associated with financial crimes.

Banks and other institutions don’t want to make the onboarding process too onerous, but relying on manual processes leaves them exposed to data entry errors. Client classification and appropriateness rules have also become more stringent – one of the most telling observations made when the FX derivatives mis-selling claims came to light was that brokers were often completely unaware of the distinction between retail and wholesale customers.


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