One of a number of ways jComply can support clients in meeting their FSA requirements is with KYC. But what should KYC cover?
Whilst surfing the web for KYC solutions I am inundated with solutions to support anti money laundering, this is certainly a part of the issue but by no means the entire solution.
What Does Know Your Customer - KYC Mean?
A standard form in the investment industry that ensures investment advisers know detailed information about their clients' risk tolerance, investment knowledge and financial position.
KYC forms protect both clients and investment advisers. Clients are protected by having their investment advisor know what investments best suit their personal situations. Investment advisers are protected by knowing what they can and can not include in their client's portfolio.
So protection covers both sides of the desk. On the one hand, the financial institution needs to understand the client not just for their own corporate governance but just as importantly to understand the clients needs too.
Many of our financial clients have turned to jComply to support the management of their policies and procedures. Take a look at the client reference at http://www.youtube.com/watch?v=EbmjJx07xJM.
Here, our client began to use jComply to support training of staff in policies and procedures however, by working with Tabaq's post sale consultancy team a number of further usages have been prescribed.
An area that was expressed as a concern during a recent visit to Central Markets had been with client suitability. A paper based fact find is currently carried out with the prospective client over the telephone, with a suitably qualified interviewer.
Depending on the outcome of the questionnaire a decision is taken as to the suitability of the applicant to be a client. This could be granted immediately, referred to a more senior manager or lead to a decline.
Some training is available to support the claim of the applicant that they are suitably aware of the derivatives and spread betting market.
By developing an electronic fact find form within jComply, the current paper based system could be improved.
The e-form system will ensure that all mandatory sections are completed satisfactorily, the e-form itself would be version controlled, a full auditable and time/date stamped version is recorded and stored within jComply and all answers could be linked back to a weighted response, signalled as red amber or green to highlight suitability by way of corporate standards rather than an interviewers own subjective interpretation.
Leading on from the fact find, the question library could be extended to an application section, where applicants are given a password to enter into the training section to understand derivatives and spread betting and of course eventually take an examination.
This would identify all acceptable clients to an external auditor through the auditing features within jComply.
All of these actions are achievable within the standard version of jComply and the e-forms module.
The deliverables are obvious and include:
• A complete reduction of paper.
• Increased security of client data.
• All applications are controlled within the secure environment of jComply.
• Subjectivity is reduced assessing the suitability of a client for certain types of trading.
• The applicant is taken through a thought provoking, self assessment that will encourage fair trading all round.
• Accessibility through a secure web link enables access through a secure log in from anywhere.
• eMail notification and time nagging features ensure an application is carried out in an appropriate timescale, convenient to both client and broker.
• Integration into existing Customer Relationship data base ensures consistency of client information.
• Workflow to senior managers for exceptions only, reducing none relevant applications.
• Automatic notification that supporting application information has been sent such as age consent forms.
• An efficient and effective way to demonstrate client due dilligence.
Of course, anti money laundering is still important an as such we have designed an additional e-form to cater for AML reporting thus improving the way the client carries out SAR's ( suspicious activity reporting). Once again the inbuilt workflow and security area within jComply provides an excellent method of achieving SAR's regulations for front line workers.
Certainly this solution has driven down the cost of governance at our client and will do so whilst improving the effectiveness of the FSA compliance process.
For more information or a demonstration visit http://www.jcomply.com/
or email sales@tabaqsoftware.com
Or telephone 01344 668400
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