Preparing to comply with know your customer (KYC) regulations

Facing potential fines, this bank had only nine months to resolve their customer data issues and align with KYC requirements.

At a glance

Since 2002, Know Your Customer (KYC) regulations have guided U.S. banks and financial institutions in verifying the identities of their clients and tracking activity to help prevent fraud and money laundering. A regional bank had been threatened with fines for shortcomings in meeting KYC standards and was given just nine months to rectify their situation. That’s why they contacted us.

Customer challenge

Our client had been managing customer data using a “homegrown” solution that fell short of the functions needed to comply with KYC. In the customer onboarding process, for example, lack of integration between lines of business (LOBs) prevented the client from assessing a new customer’s risk level across all areas (personal banking, business banking, wealth management, etc). KYC also requires banks to monitor customer transactions against “expected behavior” to flag suspicious activity. Since each LOB maintained its own systems and records, the bank fell short of requirements that entailed an enterprise-wide, holistic approach to monitoring.

Why they chose us

This client had partnered with us for the successful completion of numerous previous projects. They had also chosen Informatica as their new data management platform and were aware of our two Informatica Partner of the Year awards. The combination of a successful track record with the client and proven expertise with their chosen platform made us the right choice for this project.

Approach and solution

We met with stakeholders from compliance, IT, and individual LOBs to better understand their KYC data and to gain consensus on how to align customer data systems with KYC requirements. Over a period of nine months, we coordinated a team of 150 people to implement a new architecture that encompassed customer onboarding, master data management, and a middle tier that coordinates customer information according to KYC requirements for screening and risk scoring.

Value and benefits: “The wins”

Within the client’s tight time frame, we implemented a KYC solution across 23 systems. Each customer has a single ID that encompasses all their products and enables monitoring of all transactions across LOBs throughout the customer lifecycle. Our client now has an enterprise-wide, holistic view of customer activity that allows them to perform more accurate risk scoring, assess affiliations, improve screening, and identify suspicious activity according to KYC requirements.