Another aspect that Bank of America Merrill Lynch is very supportive
of – and I would like the entire industry and all of our clients to be
supportive of too – is using databases utilities to store the
The due diligence questionnaire responses that we have at Bank of
America Merrill Lynch are stored in a shared utility administered by a
third party. We do that because we want our other counterparties to have
an easier time getting information from us.
I ask all of my clients “is there a database or a utility that you
use to store your information?” If so, I will go there first, get that
information, and then come back to fill in any gaps that might exist.
It’s all part of the industry effort to make it easier for clients.
In terms of the regulations and the regulators, there are now
industry organisations working to develop common standards. For example,
BAFT, the Bankers’ Association for Finance and Trade, represents
financial institutions, providing feedback on proposed changes in rules
and regulations that impact KYC and AML. Aligned with other similar
bodies, its aim is to make it easier for the industry and customers to
comply by providing information.
The more governments work together to create standards, the more
utilities enable databases of answers to be created, and the more banks
agree to a common set of standards, the easier it will become. Until
then, it can be hard to keep up, for all of us.
How is technology helping with this journey?
The perfect solution for KYC/AML would be that the moment a
regulation changes, it could be implemented from a single screen for all
customers around the world instantly. Sadly, it doesn’t work like that.
Where standards are constantly evolving, technology is always going
to be behind. You cannot build it while it is changing. We are investing
technology dollars as fast as we can and I know our clients are trying
as much as they can to automate their processes. The only solution is
for change to happen at a slower pace, just so we can all keep up.
If there was one utility where all KYC information was stored
globally, then I could build one pipe in to get the information,
populate my system and all would be good for another year or two until I
had to refresh. But there isn’t one utility; there are many. We can’t
build a pipe to every single utility, so we end up with lots of manual
There needs to be a narrowing of the set of regulations into a common
standard. That doesn’t mean fewer questions, that doesn’t mean less
information. What it means is that with fewer standards, and fewer
places for those standards to be maintained, technology will not only be
able to catch up, it will finally leapfrog the flow of rules.
In the meantime, at Bank of America Merrill Lynch we have created a
system that will search every document storage system that we have
across the firm. It can look for a particular document, grab it and use
it for the purposes of KYC. We are also increasingly using artificial
intelligence (AI) to scan responses that clients give to questions, and
then auto-populate a system so that there is less manual keying.
Do you foresee change for the better?
I do but it will happen by evolution, not revolution. I am optimistic
that within five years we will not consider KYC the burden, from a
client perspective, that it is today.
All of the work that we are doing now around KYC/AML – thinking about
the questions that we ask, where the information is stored, how it is
used, how we comply with regulations – we are doing to make our clients’
lives easier and make it easier for them to do business with Bank of
America Merrill Lynch. Easier, simpler KYC/AML is in our future. Getting
there allows us more time to focus on what our clients consider more
value-added and that is helping them run their businesses more