1 |48
ResearchFindings
KnowYourCustomer(KYC):TheChallengesFacedbytheBankingSectorWhenOnboardingNewClientOrganizations
Author:GLEIFMay2018
2 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 2 |48
Content
1. Researchbackground 3
2. Keytakeaways 7
3. EntityIdentifiers 9
4. Onboardingissues 13
5. Assessingthebusinessimpact 18
6. So,willthingsgetbetter 21
7. Summary 28
8. Appendix 30
9. BetterKnowledge,BetterBusiness 44
2018-05-09
3 |482018-05-09©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 3 |48
ResearchBackground
4 |48
Thisresearchexploresthechallengesthatthebankingsectorfaceswhenitcomestoonboardingnewclientorganizations,withaviewtoinvestigating,inparticular,theimplicationsofKnow-Your-Customer(KYC)regulation.Theresearchwasconductedamong102seniorsalespeopleinthebankingsector.
ResearchOverview
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
16%
20%
17%15%
16%
16%Under50employees
50- 99employees
100- 249employees
250- 499employees
500- 999employees
1,000+employees
35
34
33
Total 102
4 |48
Numberofemployees
Base:Total(102) S3Howmanypeopleareemployedbyyourorganization?
2018-05-09
5 |48
SalesDirector,44%
VPofSales,32%
HeadofSales,17%
SalesLead,7%
Roles
Jobtitle
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 5 |48
Base:Total(102) S4Couldyoupleaseconfirmyourjobtitle?
2018-05-09
6 |48
Responsibilities
InvestmentProducts
Shares
Bonds
Derivatives(e.g.options,futures)
61%
51%
49%
44%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 6 |48
Responsibilityforbuyingandselling…
Base:Total(102) S2Forwhichofthefollowingdoyouhaveresponsibilitywithinyourorganization?
2018-05-09
7 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 7 |48
KeyTakeaways
2018-05-09
8 |48
Theonboardingprocessisfarfromslick
§ Institutionsuse,onaverage,4identifiers
Identifiersareofteninconsistent
§ 49%reportissueswiththesameIDbeingusedfordifferententities
§ 47%reportthatanentitymayhavemorethanoneidentifier
Onboardingthereforecreatesasignificantburden
§ Ittypicallytakes6weekstoonboardanewclient
§ 57%ofsalespeoplespendatleast1.5daysaweekonboarding
Thereisnoonestopshopforidentifiers
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 8 |482018-05-09
9 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
EntityIdentifiers
2018-05-09 9 |48
10 |48
Financialinstitutionsuse,onaverage,fouridentifierstohelpidentifyclientorganizations
Inordertoaccuratelyidentifyclientorganizationswiththemostup-to-datedata,financialinstitutionstendtouseavarietyofdifferentidentifiersforcross-checks.Onaveragetheyuse4differentidentifiersinternally,butaboutathirdsaytheyuse5ormoreidentifiers.
Averageof4
identifiersused
1-350%
4+50%
420%
5,15%
6,10%
7,3%
8+,2%
327%
215%
18%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Base:Total(102) Q3Onaverage,howmanydifferentidentifiersdoesyourorganizationusetoidentifyeachclientorganizationyoudobusinesswith?
2018-05-09 10 |48
11 |48
Nosingleidentifierhasgainedglobalacceptance
Thereisnosingleidentifierwhichactsasastandardfortheindustry.Howeverseveralareusedbyasubstantialproportionoforganisations.
Averageof4
identifiersused
215% 1
8%
Identifiersused
Other
DUNSID
OthervendorIDs
SECCIK– SecuritiesandExchangeCommission,CentralIndexKey
ThomsonReuters– PermID
InternalIDs
CUSIP– CommitteeonUniformSecurityIdentificationProcedures
RSSDID– ReplicationServerSystemDatabase(assignedbytheFederalReserveBank)
GlobalLEISystem– LegalEntityIdentifier
FDICCertificateID– FederalDepositInsuranceCorporation
ISOBIC– InternationalOrganizationforStandardizationBusinessIdentifierCode
45%
44%
43%
35%
34%
33%
31%
31%
15%
12%
1%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 11 |48
Base:Total(102) Q3Onaverage,howmanydifferentidentifiersdoesyourorganizationusetoidentifyeachclientorganizationyoudobusinesswith?Q2Whichofthefollowingidentifiersdoesyourorganizationusetoidentifyclients(i.e.legalentities)youdobusinesswith?Pleaseselectallthatapply
2018-05-09
12 |48
Theproliferationofidentifiersoftenthrowsupinconsistencies
Financialinstitutionsusemultipleidentifiersforcross-checking.ButthiscreatesconfusionbecausethesameIDmaybeassociatedwithmultipleentities(49%),anddifferentIDscanrelatetothesameentity(47%).
54%agree
Theuseofdifferentlegalidentifiersforthesamelegalentityleadstoinconsistencieswithupdatestodifferentreferencedatasets
Accesstothereferencedataassociatedwiththeidentifierisexpensive
Morethanoneidentifierofthesametypereferstothesamelegalentity
ThesameIDisusedfordifferentlegalentities
Referencedatafromdifferentsourcesisinconsistent
Associatedreferencedataisnotuptodate(e.g.name,address,corporate
structure)58%
46%
49%
47%
42%
IssuesWith
referencedata
Multipleidentifiers
Cost
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 3 |4212 |48
Base:Total(102) Q4Which,ifany,ofthefollowingissuesdoesyourorganizationfacewiththeidentifierscurrentlyused?Pleaseselectallthatapply.Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
2018-05-09
13 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
OnboardingIssues
2018-05-09 13 |48
14 |48
Onboardingisaburdensomeandtime-consumingprocess
Newclientstypicallytake6weekstoonboard– moreif4+identifiersareused.
Aquarteroftheprocessinvolvesmanualtasksand6in10seniorsalespeoplespendmorethan1.5daysoftheirweekonboarding.
49%agreeMiddleandback-officeactivitiesrelatedto
onboardingareamajorburden
Onaverage25%oftheonboardingprocessinvolvesmanualtasks
48%agreeItisextremelydifficulttoquantifytheexact
costofonboarding
Spendmorethan1.5daysaweekdoing
onboarding-relatedactivities
Timetoonboardanewclientorganization(weeks)
61%
1-3
Numberofidentifiersused
6 7
Total
57%
6
53%
4+
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 14 |48
Base:Total(102) Q5Inatypicalweek,whatproportionofyourtimeisspentdoingactivitiesrelatedtotheonboardingofnewclientorganizations?;Q6Onaverage,howlongdoesittakeforyourorganizationtoonboardanewclientorganization?;Q9Whatproportionofyourcompany’sprocessfortheonboardingofnewclientorganizationsinvolvesmanualtasks?;Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
2018-05-09
15 |48
Thereislittleconsensusastowhatistakingthemosttime,pointingtoalackofconsistencyinprocess
AntiMoneyLaunderingchecks
Riskrating
Validationofcustomerrelationshiptolegalentity
Collectionofcustomerinformation
Validationofcustomerinformation
Identificationoflegalentity
Documentationmanagement
CompliancewithKnowYourCustomer(KYC)regulation
Singleansweronlypermitted.
0– 250employees
Stageofonboardingthattakesthelongest
250+employees
18%#1 19%#2
11% 23%#1
16%#2 9%
18%
16%
15%
14%
13%
11%
7%
3%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 15 |48
Base:Total(102) Q10Whichstage/aspectoftheonboardingprocessfornewclientorganizationstakesthelongest?Pleaseselectone.
2018-05-09
16 |48
Butingeneral,reliabilityofinformationandlackofresourcesareasignificantchallengeformany
FalsepositiveswithAntiMoneyLaunderingalerts
Lackofprocessautomation
Accurateidentificationoflegalentities
Difficultiesreconcilingclientinformationfrommultipleinternalandexternalsources
Timeneededtocompleteonboardingprocessforclientorganisations
Contradictoryinformationfromdifferentsources
Resourcesneeded(e.g.time,people,money)
Reliabilityofinformation
Smallerbusinessesstruggleinparticulartoreconciledatafrommultiplesources(55%).
Top5challengesofonboarding
0-250 250+
49% 66%
47% 64%
49% 55%
49% 51%
55% 40%
44% 45%
38% 40%
51% 19%
Companysize57%
55%
52%
50%
48%
44%
39%
36%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 16 |48
Base:Total(102) Q1Thinkingaboutonboardingnewclientorganizations,whatwouldyousayarethetopchallengesyourorganizationfaces?Pleaseselectupto5.
2018-05-09
17 |48
KYCprovidershavenotyetshowntheirvalueinthemarketplace
MostuseKYCproviders,howevermanycomplainaboutout-of-datereferencedata(47%)andthecostofthesesolutions(46%).
AveragenumberofKYCprovidersused3
Expensive
Non-transparentmeansofidentifyingandreportingcorporatestructure
LimitedCoverage
Referencedataisnotalwaysuptodate 47%
46%
46%
43%
Increasesto59%ofthoseusing4+identifiers
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 17 |48
Q14HowmanyKYCserviceprovidersdoesyourorganizationusetoaidKYCprocesses?Q15WhatwouldyousayarethemaindrawbacksofusingKYCserviceproviders?Pleaseselectallthatapply.
Base:Total(102)
2018-05-09
18 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
AssessingtheBusinessImpact
2018-05-09 18 |48
19 |48
Clientsarenotalwayssympathetictothedemandscomplianceplacesoninstitutions
2in5seniorsalespeoplesaythattheriskoflosingbusinessduetothelengthandcomplexityoftheonboardingprocessisatopchallenge.Clientsareparticularlyconcernedabouttheamountofinformationtheyneedtosharewiththird-parties.
Lackofresource
Needtopassregulatoryrequestsontoclientorganizations
Timeneededtoupdateclientorganizationsonnewregulatoryrequirements
Lackofregulatoryunderstanding
TimeneededtocomplywithKYCregulatoryrequirements
Lackofclientunderstandingofregulatoryrequirements
ContinuouschangesinKYCregulation
Clientconcernsaboutsecurityaroundwhoisviewingtheirdocuments
Riskoflosingbusinessduetolength/complexityoftheonboardingprocess 39%
38%
37%
36%
28%
27%
26%
24%
50%agree
It’sbecomingmoreandmoredifficult tocomplywithKYCregulation
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 19 |48
14%
Base:Total(102) Q13StillthinkingaboutcompliancewithKnowYourCustomer(KYC)regulation,whatarethetopchallengesforyourorganization?Pleaseselectupto3.;Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
2018-05-09
20 |48
Longonboardingprocessescanleadtolossofbusiness
Around15%ofbusinessisatriskasaresultoftheclientlosingpatiencewiththeprocess.
And14%ofbusinessislostbecausetheclientidentitycannotbeverified.
Proportionofbusinessestimatedtobelost:
14%Transactionisrejectedbecausenotenoughinformationisknownaboutthelegalidentityofthecounterpart
15%Legalentityleavesbecauseonboardingprocessistoodifficult/takestoolong
55%agreeProspectsmightturntocompetitorsifittakestoolongtoonboardthemasnewclientorganizations
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 20 |48
Q16Whatproportionofyourorganization’sbusinessdoesn’tgoaheadduetoeachofthefollowingreasons?Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
Base:Total(102)
2018-05-09
21 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
So,willthingsgetbetter?
2018-05-09 21 |48
22 |48
52%believethetimetoonboardwillincreaseoverthenext12months
52%Increase
29%Staythesame
15%Decrease
KeyDriversofChange
§ IncreasedFraud
§ Tighterregulations
§ Businessgrowth
§ BudgetLimitations
§ ProcessLimitations
§ Effortstostreamline
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 22 |48
Base:Total(102) Q7.Howdoyouexpectthetimetoonboardnewclientorganizationstochangeoverthenext12months?Q8.Pleasegiveareasonforyouranswer.
2018-05-09
23 |48
“Daybyday,thefraudandriskfactorsaregrowing.So,toavoidthematallcosttherehastobebettertechnologiesandstepstoundergobeforetakingclientsonboard.”
“Withmoreregulationandmorescams,itwilltakealittlelongertocompletealltheproceduresforclientonboarding.”
“TheKYCtakeslongertoprovidetherequiredinformationascomparedtoprevioussetup.”
“WiththeimplementationofKYC,thevalidationprocesstimeistobeincreased.”
“Weareexpandingourbusinessaggressively.”
“Weareabouttochangeourmanpowerand,whilenewemployeesadjustandgainspeedweexpectthetime[toonboard]toincrease.”
BusinessGrowth
TighterRegulations
IncreasedFraud
52%Expectthetimetoonboardnewclientstoincrease
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 23 |482018-05-09
Base:Total(102) Q7.Howdoyouexpectthetimetoonboardnewclientorganizationstochangeoverthenext12months?Q8.Pleasegiveareasonforyouranswer.
24 |48
Documentationmanagementrepresentsmostscopeforimprovement
AntiMoneyLaunderingchecks
Riskrating
CompliancewithKnowYourCustomer(KYC)regulation
Validationofcustomerrelationshiptolegalentity
Validationofcustomerinformation
Collectionofcustomerinformation
Identificationoflegalentity
Documentationmanagement
40%
0– 250employees
250+employees
23%
40%
16%
19%
32%
42%
37%
34%
32%
31%
30%
24%
23%
Identificationoflegalidentityalsohasthepotentialtobemademoreefficientaccordingto2in5seniorsalespeopleinthebankingsector.
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 24 |48
Base:Total(102) Q11Andwhichstages/aspectsoftheonboardingprocessfornewclientorganizationshavethebiggestscopetobeimprovedintermsofefficiency?Pleaseselectuptothree.
2018-05-09
25 |48
Newtechnologiesareexpectedtobecomepartoftheonboardingprocess
Themajorityoffinancialinstitutionsexpectnewtechnologiessuchasdigitalsignaturesandblockchaintobeintegratedintheonboardingprocessofnewclientorganizations.
0-250 250+
42% 62%
36% 66%
44% 49%
Companysize
DigitalSignatures
DigitalCertificates
KYCUtilitiesBasedonBlockchainTechnology
61%agreeTheriseofdigitalwillmakeidentityverificationharderduetoa
riseinthenumberoflegalentitiestransactedwith.But
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 25 |48
Base:Total(102) Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
2018-05-09
26 |48
Goingforward,legalentity
onboardingwillincorporate…
DigitalSignatures
51%
KYCUtilitiesBasedonBlockchainTechnology
50%
DigitalCertificates
46%
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 26 |482018-05-09
27 |48
TheKYCburdenisanongoingone
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Onlytwothirdsoffinancialinstitutionsbelievetheyholdaccurateclientinformation.Lessthanathirdofclientscanbereliedontoreportmaterialchangestotheirlegalentity,sotheburdenremainswiththeinstitutiontoconductregularreviews.
Believeit’seasiertomonitorformaterial
changesafteronboardingiscompleted
54%
ofclientspromptlyreportmaterialchangestotheirlegalentity
Believetheinformationtheyholdonclient
organizationsisaccurate
66%
Only29%
Reviewinformationheldonclientorganizationsatleast every12months
63%
But… So
27 |48
Base:Total(102) Q17Howwouldyouratetheaccuracyoftheinformationyourcompanyholdsonclientorganizationsitonboardedinthepast?;Q18Whatproportionofyourclientbasedoyoubelievepromptlyreportsanymaterialchangesaboutthemasalegalentity?;Q19Andhowfrequentlydoesyourorganizationreviewtheinformationyouholdaboutthestructureofyourclients’legalentity?;Q20Towhatextentdoyouagreeordisagreewiththefollowingstatements?
2018-05-09
28 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Summary
2018-05-09 28 |48
29 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
1
2
3
InstitutionsarefacinganincreasingburdenasaresultoftheneedtocomplywithKYC
Lackofreliableandconsistentidentifiersiscreatingmoreworkandlesscertainty
Thereisclearlyanopportunitytoalignononeidentifiertogenerateefficiencies
29 |482018-05-09
30 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Appendix
2018-05-09 30 |48
31 |48
Top5challengesofonboardingnewclientorganizations
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Total 0-250 250+ 1-3 4+
Contradictoryinformationfromdifferentsources 52% 49% 55% 39% 65%
Timeneededtocompleteonboardingprocessforclientorganizations 50% 49% 51% 37% 63%
Reliabilityofinformation 57% 49% 66% 55% 59%
Resourcesneeded(e.g.time,people,money) 55% 47% 64% 53% 57%
Accurateidentificationoflegalentities 44% 44% 45% 33% 55%
Difficultiesreconcilingclientinformationfrommultipleinternalandexternalsources 48% 55% 40% 45% 51%
Lackofprocessautomation 39% 38% 40% 39% 39%
FalsepositiveswithAntiMoneyLaunderingalerts 36% 51% 19% 35% 37%
Companysize Numberofidentifiersused
31 |48
Base:Total(102) Q1.Thinkingaboutonboardingnewclientorganizations,whatwouldyousayarethetopchallengesyourorganizationfaces?Pleaseselectupto5.
2018-05-09
32 |48
Onboardingtime
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Proportionoftimespentdoingonboarding-relatedactivitiesinatypicalweek
28%
0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100% Don’tknow
3%
14%
25%
22%
3%4%
1%
0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100% Don’tknow
32 |48
Base:Total(102) Q5Inatypicalweek,whatproportionofyourtimeisspentdoingactivitiesrelatedtotheonboardingofnewclientorganizations?
2018-05-09
33 |48
Onboardingtime
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Averagetimeittakestoonboardanewclient
Morethan4months
3to4months
2to3months
1to2months
Between1weekandamonth
Lessthanaweek
Don’tknow
1%
8%
17%
30%
36%
7%
1%
33 |48
Base:Total(102) Q6Onaverage,howlongdoesittakeforyourorganizationtoonboardanewclientorganization?
2018-05-09
34 |48
0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100%
Proportionofonboardingprocessthatinvolvesmanualtasks
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
6%
0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100%
19% 20%
25% 24%
6%
34 |48
Base:Total(102) Q9Whatproportionofyourcompany’sprocessfortheonboardingofnewclientorganizationsinvolvesmanualtasks?
2018-05-09
35 |48
IdentifiersandKYCprovidersused
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Numberofidentifiersused
1-350%
4+50%
420%
5,15%
6,10%
7,3%
8+,2%
327%
215%
18%
35 |48
Base:Total(102) Q3Onaverage,howmanydifferentidentifiersdoesyourorganizationusetoidentifyeachclientorganizationyoudobusinesswith?
2018-05-09
36 |48
IdentifiersandKYCprovidersused
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
NumberofKYCprovidersused
327%
215%
230%
338%
416%
5,6%
1,8%
6+,1%
None,1%
36 |48
Base:Total(102) Q14HowmanyKYCserviceprovidersdoesyourorganizationusetoaidKYCprocesses?
2018-05-09
37 |48
Accuracyofclientinformation
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Accuracyofinformationheldaboutclientorganizations
327%
215%
338%
416%
1,8%
5- Extremelyaccurate 4 3 2 1- Notatallaccurate
11% 55% 30% 4%
37 |48
Base:Total(102) Q17Howwouldyouratetheaccuracyoftheinformationyourcompanyholdsonclientorganizationsitonboardedinthepast?
2018-05-09
38 |48
Accuracyofclientinformation
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Proportionofclientbasethatpromptlyreportsmaterialchanges
215%4
16%0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100%0-5% 6-10% 11-20% 21-30% 31-50% 51-75% 76-100%
2%
8%
28%
31%
17%
12%
2%
38 |48
Base:Total(102) Q18Whatproportionofyourclientbasedoyoubelievepromptlyreportsanymaterialchangesaboutthemasalegalentity(e.g.changesinidentityinformation,includingwhoownsorcontrolsthem)?
2018-05-09
39 |48
ImpactofcompliancewithKYCregulation
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Impactontimeneededtocompleteonboarding
Impactonmonetaryresourcesneededtocompleteonboarding
5- CriticalImpact 4 3 2 1- MinimalImpact
33% 32% 17% 15% 3%
24% 37% 23% 14% 2%
39 |48
Base:Total(102) Q12WhatistheimpactofensuringcompliancewithKnowYourCustomer(KYC)regulationonthetimeandmonetaryresourcesneededtocompletetheonboardingprocessfornewclientorganizations?;Q20Towhatextentdoyouagreeordisagreewitheachofthefollowingstatements?
2018-05-09
40 |48
ProportionofbusinesslostduetoonboardingandIDverificationissues
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
28%
20%
19%
28%
31%
32%
24%
26%
20%
14%
16%
18%
4%
4%
8%
1%
2%
2%
Transactionisnotcompletedbecausethelegalentitycannotbeonboardedquicklyenough
Transactionisrejectedbecausenotenoughinformationisknownaboutthelegalentityofthecounterpart
Legalentityleavesbecauseonboardingprocessistoodifficult/takestoolong
0-5% 6-10% 11-20% 21-30% 31-50% 51%+
40 |48
Base:Total(102) Q16Whatproportionofyourorganization’sbusinessdoesn’tgoaheadduetoeachofthefollowingreasons?
2018-05-09
41 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 41 |482018-05-09
“Daybyday,thefraudandriskfactorsaregrowing.So,toavoidthematallcosttherehastobebettertechnologiesandstepstoundergobeforetakingclientsonboard.”
“Withmoreregulationandmorescams,itwilltakealittlelongertocompletealltheproceduresforclientonboarding.”
“TheKYCtakeslongertoprovidetherequiredinformationascomparedtoprevioussetup.”
“WiththeimplementationofKYC,thevalidationprocesstimeistobeincreased.”
“Weareexpandingourbusinessaggressively.”
“Weareabouttochangeourmanpowerand,whilenewemployeesadjustandgainspeedweexpectthetime[toonboard]toincrease.”
BusinessGrowth
TighterRegulations
IncreasedFraud
52%Expectthetimetoonboardnewclientstoincrease
Base:Total(102) Q7.Howdoyouexpectthetimetoonboardnewclientorganizationstochangeoverthenext12months?Q8.Pleasegiveareasonforyouranswer.
42 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
29%Expectthetimetoonboardnewclientstostaythesame
“Asourorganisationisfacingcrisisfilledyear,wehavelimitedbudgettospendandaccesstosomeoftheclientsdataisexpensive.”
BudgetLimitations
“Idon'tthinkthereisanythingelsewecandotoincreasethespeedofgettingclientsonboardwithus.”
ProcessLimitations
“Companyhasjustthisyeartakenundernewsystemswhichhaveimprovedourmethodsdrastically.So,incoming12monthsIassumeittostaythesame.”
“Certainprocessesandduediligencecannotbefurtherstreamlined.Alsoatthemercyofotherorganizationstimelines.”
“Currentlyourbudgetisflatsowecan'tchange.”
42 |48
Base:Total(102) Q7.Howdoyouexpectthetimetoonboardnewclientorganizationstochangeoverthenext12months?Q8.Pleasegiveareasonforyouranswer.
2018-05-09
43 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
15%Expectthetimetoonboardnewclientstodecrease
“Myorganizationistakingoversomelatesttechnologiestospeedupthecollectionofinformationandsignificantlyreducingtheriskoffraud.”
“Technologyhasstreamlinedourprocesses.”
Newsystems
NewprocessBusinessdecisionSpeedupcollection
TechnologyStreamline
Betterworkforce
Betterstrategies
43 |482018-05-09
Base:Total(102) Q7.Howdoyouexpectthetimetoonboardnewclientorganizationstochangeoverthenext12months?Q8.Pleasegiveareasonforyouranswer.
44 |48©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
BetterKnowledge,BetterBusinessSolutionproposedbyGLEIFtotheissuesidentifiedwiththeresearch
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Thefindingsinthisreportspeakvolumesabouttheneedforanaccurateandtransparentsourceforlegalentityidentification.
BetterKnowledge,BetterBusiness
2018-05-09©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Toomanybusinesses,especiallyinthefinancialservicesindustry,arelosingvastamountsoftimeandmoneyeachtimetheymakeabusinesstransactionasaresultofarangeofinefficientprocesses– andit’sthatinefficiencythatmeanstheyruntheriskoflosingthebusinessanyway.
Nottomentionencounteringcomplianceandsecurityissuesbecauseofpooridentification.
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BetterKnowledge,BetterBusiness
2018-05-09©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
Notonlywillitreduceoperationalfriction,butitalsomakesinformationmoreaccessibleandreliable.Thisopportunitytocutcostsandgetmoreefficientandaccurateintheiroperations,allwhilstgainingdeeperinsightsintotheglobalmarketplace,shouldappealtoallbusinesses.
AdoptionofLEIspromisestodeliverrealbusinesscapabilities,benefitsandquantifiablevalueforthosebusinessesthatmaketheswitch.
Butthensoshouldthefactthataglobalstandardforlegalentityidentification,withopenaccesstotransparentandhighqualityreferencedataforall,wouldbeaforceforgoodinthefinancialindustryasawhole.
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Weenablesmarter,lesscostlyandmorereliabledecisionsaboutwhotodobusinesswith
©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted
FormoreinformationandregularupdatesonGLEIFactivitiesandLEIdevelopments,visittheGLEIFwebsitewhichisavailablein14languagesatwww.gleif.org
Followuson:
2018-05-09
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Thispresentationcontainsconfidentialandproprietaryinformationand/ortradesecretsoftheGlobalLegalEntityIdentifierFoundation(GLEIF)and/oritsaffiliates,andisnottobepublished,reproduced,copied,ordisclosedwithouttheexpresswrittenconsentofGlobalLegalEntityIdentifierFoundation.
GlobalLegalEntityIdentifierFoundation,theGlobalLegalEntityIdentifierFoundationlogoareservicemarksofGlobalLegalEntityIdentifierFoundation.
ISOandtheISOlogoareservicemarksofInternationalOrganizationforStandardization.Otherproductsandservicesandcompanynamesmentionedhereinarethepropertyofandmaybetheservicemarkortrademarkoftheirrespectiveowners.
Limitations
2018-05-09©2018GLEIFand/oritsaffiliates.Allrightsreserved.|Author:GLEIF|Know-Your-Customer|GLEIFrestricted 48|48