Customer Due Diligence (CDD) in a Big Hurry
To comply with KYC regulations regarding transfer of funds, a large global bank has begun using the Temenos Infinity Journeys platform to rapidly roll out a digital customer due diligence (CDD) capability on an accelerated schedule.
Temenos Infinity Journeys is uniquely suited to this type of application, which is becoming more common in the current climate of increased enforcement of AML and KYC regulations. Pre-built security; privacy; omnichannel access from phone, tablet, PC or branch; and the ability to create a highly customized questionnaire form are some of the features that lend themselves to CDD applications. Most important is the rapid time to market that Journeys enables, given the intense compliance pressures to put CDD systems in place.
The CDD directives given to the Temenos customer bank fall into the area of remediation, which is the requirement to update and remove deficiencies found in the records of bank clients. In this case, portions of the remediation must be demonstrably complete within 8 weeks of the compliance order, creating an extremely short timeline.
The challenge was to gather a large volume of information from new and existing customers without creating an undo customer burden, to simultaneously verify the accuracy of the information, and to capture it in a way that met the reporting and record-keeping requirements of the bank.
In this case, there were two driving requirements:
- In compliance with Financial Action Task Force (FATF) Recommendation 10 (formerly known as Recommendation R.5), the bank is required to use reliable, independent sources to validate the customer identity when large transactions, cross-border wire transfers, or any suspicious transactions occur. At both account opening time and at regular intervals, the bank must verify the identity of all associated account owners. Of course, detailed records must be kept on each verification, to demonstrate compliance and to support authorities in the event of suspected criminal activity. This KYC regulation applies to a large number of routine customers in multiple countries.
- For a smaller set of customers who transfer funds to and from the USA, a more stringent set of customer due diligence questions is required. Customers clearing funds through the US bank system must be remediated within 30 days or the bank risks stiff penalties. A far more significant set of up to 200 KYC questions must be answered, depending on the specific customer situations. Because the customers are in a range of countries with varying service levels for digital banking, many customers do not have an existing online relationship with their bank.
Temenos Capabilities for CDD
As a platform for creating highly customized customer-facing transactions, Temenos provided an ideal solution for the bank to meet the requirements. Temenos created a digital CDD acquisition system, accessible from mobile and desktop devices, and compatible with branch and call center systems. It included:
Rapid time to market: Temenos Infinity Journeys forms can be designed and implemented in days, without software coding. Temenos user experiences are data-driven, not code-driven, so they can be quickly developed, tested and continuously changed. CDD implementations can be live in weeks.
Adaptive forms: Because the range of required questions differs for bank clients based on their unique situation, Temenos adaptive forms use initial input to determine subsequent questions to ask. Rather than display a list of 200 questions, a client will only see the ones that are relevant.
Mobile responsive: Temenos’ ‘design once, display anywhere’ browser-based capabilities allow the remediation forms to be accessed by bank clients on any device, and without requiring an online bank app or log in.
Flexible integration to existing KYC systems: Journeys is designed to share information with existing systems of record, so multiple options exist to receive and deliver customer data from/to the bank KYC databases.
Loose coupling with back-office systems: Temenos Infinity Journeys is a customer engagement layer, separated from the bank systems of record, pushing an updated set of customer records to the bank only once the package is complete. This means no changes or release cycles on the bank back-office systems of record.
Security, Privacy and Local Hosting: Transact meets the most stringent requirements for security, control of encryption, personally identifiable information (PII) and hosting location.