BELLIN and SWIFT Enabling Superior KYC

SWIFT have become the power player in KYC

KYC und BELLIN blog post header
Martin Bellin author pictureAuthor: Martin Bellin

In the first week of April, information was leaked about Bloomberg discontinuing their offering meant to challenge KYC. There have been a handful of notable multinational clients like Coca Cola and Cargill who have implemented this platform in collaboration with Citi Bank, yet Bloomberg still decided to cut ties with the project on the premise of a lack of demand. 

Although it has not been confirmed by Bloomberg, the announcement of SWIFT to enter the corporate market with their global KYC platform – already being used by a bevy of banks for years – may be the tipping point for Bloomberg to retreat.  

KYC progression signifies an obvious benefit to the industry as a whole, but the project is simply too big for one commercialized party to take on. Creating a standardized process that can live in Europe is already difficult enough and to attempt to create a global standard is approaching impossibility. Single-serving solutions that are tailored to one bank or country would also fall short of solving the problem and would surely fail to surpass global regulations. 

SWIFT has provided support to banks helping them with their KYC requirements for the account process required to enable correspondent banking. This platform could potentially work for corporates too, and with SWIFT, the market deals with a recognized player who is a partner to thousands of banks anyway. 

SWIFT for Corporates: An exclusive group

Let us consider how the repository provided by SWIFT will work and what some of the potential consequences are for corporates.

Initially, SWIFT opens the repository only to companies with a BIC: an exclusive community of merely 2,000 companies will be able to benefit from it. The exclusive nature of this community is because the use of a SWIFT connection is still considered expensive and complex to implement. Since 2013, SWIFT has enabled specialized and carefully-selected application providers to embed SWIFT access into their products. At BELLIN, we are one of those early, carefully-chosen brands that have adopted this technology, resulting in successful connections of over 150 corporates to the network. Corporates with turnovers lower than EUR 100 million benefit from the affordable connectivity the same way EUR multi-billion groups do. Over the years, the onboarding to SWIFT has become an efficient standard and has been made affordable, easy to use, and simple to implement. 

More than a year ago, we kicked off a project to serve our customers with solutions decreasing the manual work for maintaining and digitizing KYC, particularly signing authorities with banks. The corporates keep control over all documents and the required personal data. In both cases, they keep the data within the treasury application where they maintain the bank mandates anyway. Our responsibility is still to ensure that the data available can be transferred electronically from the banks – using the SWIFT initiative – to the repository now provided to corporates. This leverages the SWIFT connectivity and further proves the value of the global single payment platform established in the entire global corporate group by providing universal accessibility to the connection.  

Once the data is recorded and reviewed in the application, blockchain technology can be applied to keep this data free of manipulation until it has arrived at the recipient’s database (for example at SWIFT). The same transfer will be made available for bank mandates, which are not part of the SWIFT repository, but need to be frequently updated and exchanged with banks (again via SWIFT). 

Key takeaways

  1. The application for a SWIFT code propels corporates into an exclusive community that provides immense benefits throughout the group. 
  2. Corporations will maintain their data in their treasury platform globally and will use that data for the reporting to the KYC repository offered and will keep this updated and controlled. 
  3. Bank mandates are going to be digitized based on the same technology using the same basis and will be widely accepted by recipients either by SWIFT if they add this to their service, or directly by the bank, who is now in the position to transform the paper-based process into something digital.

In the end, there is still a way to go but BELLIN, SWIFT, the corporates, and the system providers can see more than just a silver lining. That silver lining has become a clear path to digitizing KYC and bank mandates, and we plan on taking that path with a full head of steam.

Would you like to learn more about BELLIN’s payments solutions? Just reach out to us for a tm5 demo, or visit our main tm5 page.

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