Best managed/support services provider: Equiniti KYC Solutions

Operational Risk Awards 2017: Sharia compliance tool is just one of the firm’s pioneering KYC initiatives

OpRisk Awards 2017
Patrick Ryan, Equiniti KYC Solutions

After almost a decade, Patrick Ryan, a managing director at Amsterdam-based technology provider Equiniti KYC Solutions, still remembers 2008 as a key year. That was when his firm, then named KYCnet, launched ‘KYC-as-a-service’, taking the on-demand software model and applying it to know-your-customer processes for the first time.

“That has made a huge difference to our ability to understand, configure, manage and service our clients’ requirements,” says Ryan. In the intervening nine years, the firm has grown quickly to support the needs of dozens of top-tier clients. Now, following its acquisition by Equiniti Group in 2016, under the name of Equiniti KYC Solutions, the team in Amsterdam is exposed to 1,700 clients, including about 70% of the FTSE 100.

Judges praise the service for understanding its clients’ needs and effectively pioneering the model of KYC-as-a-service. “KYC is a key risk for any financial institution and it is crucial that firms can demonstrate to regulators and other third parties that they have robust and effective KYC processes,” says one judge.

“I was particularly impressed with Equiniti [because it offers] both an end-to-end process as well as the ability to purchase a self-service offering,” he adds. “This flexibility enables firms to play to their strengths and create a bespoke service to suit their business needs.”

Equiniti KYC Solutions helps firms to manage client processes throughout the duration of a contract, from onboarding to contract completion, and comprises regulatory due diligence, periodic and event-driven reviews and remediation.

KYC is complex and costly,” says Ryan. “Our clients have all looked carefully at the core competency concept and have determined that, yes, KYC is a core responsibility but not a core activity. Ensuring KYC is done to the level required to satisfy societal and regulatory requirements is core, but meeting the regulatory challenges and actually doing KYC is our core competency.”

One of the company’s unique achievements is its Sharia-KYC offering, which helps Islamic financial institutions ensure sharia compliance for customers’ businesses, goods and services. The module automatically flags up particular business activities that may be based on forbidden food or drinks, gambling or pornography.

“Sharia law is a growing concern in many financial institutions and the Sharia-KYC component will be particularly attractive for those firms undertaking relevant activity,” says one judge. “This component will help firms and, from my own personal experience, will greatly assist them in understanding the complexities of sharia law.”

Ryan adds: “It is based on globally accepted anti-money laundering due diligence principles but with added sustainability-like checks, as well as a number of interesting financial analysis health checks. In many respects, sharia, sustainability, corporate social responsibility and third-party oversight due diligence are taking the regulatory requirement to the next level.”

OpRisk Awards 2017
The Equiniti KYC Solutions team

Ryan attributes Equiniti’s success to a number of factors, including the talent of its staff. “I’m most proud of our people – the true believers who have served our clients, shaped our processes and built our technology over the past eight years. KYC is complex and needs the right people who can drive the right processes and technology to deliver the right outcomes for our clients.”

The purchase by Equinity has expanded the firm’s reach. Within six months of the deal’s completion, it had won a major new European banking client and doubled staff numbers, according to its website.

One of the greatest strengths of Equiniti’s offering is its configurability, says Ryan. “We launched our second-generation toolset, KYCnet, in 2013,” he explains. “Before that, we had a system – like many of our clients – that required quite a bit of IT intervention to handle new and changing requirements. Not any more.”

The ability to adapt to changed circumstances is all important and Equiniti KYC is built for change, says Ryan. He offers an example of a recent client project: “We went live after five weeks of configuration and testing for hundreds of analysts with a 22-step process based on 350 pages of policy for one global bank. KYC requirements change, and a KYC toolset needs to accept and embrace change.”

The company has clearly come a long way since its inception, tracking the development of the KYC space in general. “Our journey over the past eight years, from a scrappy and aspirational start-up to a confident scale-up to the Equiniti PLC managed service, has in many respects been a foreshadowing of the evolution of KYC,” he says.

There is no time to stand still, however, and Ryan has lofty ambitions: “My end-goal has always been true continuous due diligence that leverages artificial intelligence, advanced application programming interfaces, and social media, deep web and press monitoring to risk-assess our clients’ customers and relations in real time. Part of that vision also includes grouping our clients together to create national utilities – an idea we first proposed in 2012.”

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