| |OCTOBER 20228CIOReviewIN MY OPINIONLOW CODE SYSTEMS CAN IMPROVE USER EXPERIENCE AND SAVE TIMEThe Compliance "Know Your Customer" (KYC) process is a business workflow process to capture the details of a business' client relationships. Defined by FINRA regulations, this process ensures that financial institutions verify the identities of customers and their beneficial owners and calculates the risk associated with the client relationships.It can be challenging to devise a systemic workflow to automate the KYC process. Global firms operating in multiple jurisdictions with different regulators are subject to a multitude of data collection requirements, often contradictory. Different business lines, corporate entities or subsidiaries in different countries, and different products all affect the data set required by the KYC process. Banking and KYC regulations are subject to frequent change. In addition, the firm's Legal and Compliance department's interpretation of these regulations evolves over time, leading to additional changes to KYC requirements.An application designed to automate the KYC process must be flexible enough to accommodate the different data sets and workflows dictated by these differing requirements. It must be easy to change the data forms and data attributes that are captured in each scenario as regulations, corporate entities or products change over time. Organization structures and user roles may change, and users may enter, leave, or change teams frequently. The risk ratings of countries, products, and client's related parties frequently change. Parties may be "PEPs", political entities, or there may be negative news against them. The data must be collected, validated against the regulator requirements, stored, then formatted into very specific regulatory reports which are reviewed by auditors and regulators.A typical global bank may have more than 350,000 combinations of data elements embodied in its KYC program. These are enveloped within a dozen or more master forms or By John Entwistle, Senior Vice President, Compliance Systems, Brown Brothers HarrimanJohn Entwistle
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