As banks look to follow their clients into new markets, they will find themselves working ever harder to cope with the demands of Know Your Customer (KYC) and Know Your Transaction (KYT) regulations, which require each new counterparty to be thoroughly vetted before any transaction takes place. Yet they need not face this challenge alone, writes Michele Gentile, head of FI clearing sales at UniCredit, in FX-MM.
Communal KYC and KYT repositories offer an excellent resource for banks – eliminating the need to carry out the same research multiple times. And while a comprehensive repository will take time to establish, in the meantime, banks can reduce the workload by acting as clearing partners for one another – with each bank clearing transactions with counterparties they have already researched.
Beyond compliance, clearing can generate positive knock-on effects on banks’client services, integrating innovative products and saving time for partners to concentrate on what’s most important: meeting the needs of their clients.
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