Compliance pressure on Swiss banks is mounting. The increase in regulatory complexity has resulted in higher risks, greater costs and repeated changes to compliance processes, which, together, pose a significant challenge for banks. As a result, financial service providers are increasingly investing in regtech – smart solutions that draw on modern technologies and mitigate the costs of regulatory compliance across industry players.
The Compliance Utility aims to establish a new compliance standard in Switzerland by optimizing know your client (KYC) processes with a semi-automated tool and providing banks an option to outsource parts of the business processes – a first in the Swiss financial market. Compliance processes include those related to anti-money laundering and combatting the financing of terrorism. The Utility will establish and operate the service on top of a bespoke developed compliance technology and process platform.
The foundation for this initiative was initially envisioned in discussions with members of the Working Group Industrialization within the Association of Swiss Asset and Wealth Management Banks (VAV/ABG). The association will continue to act as a sounding board for the initiative and various member banks have already conducted feasability assessments with the Utility.
The first services for private banks are set to be operational in the second half of 2019, covering processes related to the client KYC lifecycle in a comprehensive and intuitive solution. The offering includes a standardized KYC report based on information from multiple leading data sources and relevant publicly available information.
The Compliance Utility will form a platform for the creation of further compliance services and solutions. Banks are invited to get an impression of the initial services, challenge their current processes and see how these might help shape future services developed according to their needs.
Daniel Dahinden, Head Innovation & Digital SIX, says, “We are offering a completely new and comprehensive compliance solution for the entire Swiss banking industry and helping our customers face the numerous challenges related to compliance functions,” and adds, “Banks can realize efficiency gains by relying on the new standard in compliance.”
Nick Davies, Chief Operating Officer at Deloitte Switzerland, says, “Every Swiss bank is simultaneously managing risks, reducing costs and driving innovation in all parts of their business. To address this complex requirement, we see a number of banks currently considering implementing solutions that automate business processes and compliance tasks such as KYC,” and adds, “Deloitte has made significant investments into developing an innovative platform to address such needs.”