The challenges of KYC

1. Setting the Standard as the first secure communication platform for
Know Your Customer (KYC) and Customer Due Diligence (CDD)
purposes for the Financial Industry.

2. Data Collection - Case Study(1)
Cash Management Service Provider
(a top 50 bank)
• Needs to KYC 1,000 (medium to high risk)
cash management clients per year
• Requires detailed KYC questionnaire from all
clients
• Collects client information via public sources
and sends KYC questionnaire to all clients
• Average turn around time for new client is 34
days
• Average turn around time for existing client is
70 days
• Average time spent for collecting data
(search and chase) is five hours
• Responses received by Email with non-
standard PDF attachment
• Manual input of data required (1 hour)
• Total time spent: 6,000 hours
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Client Bank
(a smaller bank that requires Cash Management services)
• Receives 100 KYC data requests per year
• KYC Data requests include requirement to fill
a KYC questionnaire
• 4-8 hours to fill each questionnaire
• One hour per request to collect other
documents, draft and send response
• Total time spent: 500-900 hours
100 banks have a relationship
 100 banks process 99 client KYC’s
= 9.900 incoming KYC’s
 100 banks respond to 99 KYC requests
= 9.900 outgoing KYC’s

3. Bank A
1. Approaches Client
4. Receives KYC data
1. Receives Bank A’s
request for own KYC
data
2. Checks validity of own
KYC data and updates
data if required
3. Releases own KYC
data to Bank A via KYC
Exchange Net
Other Client
Relationship
Banks:
Receive notification if
Client Bank updates
KYC data in Step 2
Client Bank’s KYC
Standard Questionnaire
& other Documents
SaaS of
KYC data and
relationships:
Bank A
Relationship Banks
Initiator Bank:
www.kyc-exchange.net
SaaS / Web-Portal Client Bank:
1
2
3
4
5
Storage as a service (SaaS)
KYC Exchange Net enables Client Banks to store their KYC data online (SaaS). The KYC data remains fully owned by the
Client Bank and is shared with business partners (Initiator Banks) on request. Any update of previously shared data is
communicated to all previous recipients in real time (living KYC). No ‘task’ on the platform takes more than four clicks and
all (with the exception of filling the KYC Standard Questionnaire) can be performed, on average, in under one minute.
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4. Content (1)
KYC Standard Questionnaire
All banks that are using KYC Exchange Net are required to
complete an extensive KYC Standard Questionnaire
The Questionnaire follows a best-practice approach and
addresses AML/CFT recommendations published by:
• FFIEC BSA/AML Examination Manual
• The New York Clearing House Association Guidelines for
Counter Money Laundering Policies and Procedures in
Correspondent Banking
• UK Money Laundering Regulations 2007
• Relevant chapters of the Joint Money Laundering
Steering Group Guidance Notes
• Relevant FCA/FSA pronouncements on financial crime,
primarily the ‘Banks’ management of high risk money
laundering situations’ (June 2011) report
The Standard Questionnaire will be updated frequently to
reflect changes in best-practice
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KYC Supporting Documents
• Commercial Register or similar document which
confirms that the Institution is registered
• Proof of ownership or applicable listing evidence from a
recognised stock exchange
• Ownership chart/structure
• Banking License or current proof of regulation
• Proof of Registration Number with local regulator(s) or
membership of regulatory body or bodies
• Articles of Association or similar documents
• VAT or VAT-equivalent certificate
• Internal organisation chart/structure
• List of internal audit reports and dates
• Latest Audited Annual Report
• Latest Annual Report of ultimate beneficial owner
• Biographies of at least three Members of the Board
• USA PATRIOT Act Certification
• List of the Institution's correspondent banking
relationships for each currency
• Optional: The Institution's list of authorised signatures

5. Content (2)
Administrative information
Allows to match static client data
against own records and to understand
the client’s business and customers
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Evaluative information
Allows to analyse the client’s AML/ CFT
policies, the regulatory environment
and internal controls for risk assessment
purposes

6. Supports: Risk Based Approach
• Dynamic Questionnaire displays relevant
questions only – depending on previous
answers
 Questions 1.1-1.3 are only visible if
question 1 is answered “no”
 Question 1.3 allows to add an unlimited
number of subsidiaries via “+” function
• Context related help-information is
available  were needed:
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7. Data Collection: Case Study(2)
Cash Management Service Provider
(a top 50 bank)
• Needs to KYC 1,000 (medium to high risk)
cash management clients per year
• Request of KYC Data via KEN: Two minutes
per client
• Average turn around time for client new to
the platform: ~35 days
• Average turn around time for client already
on the platform: “One Click” by the client
• All responses arrive in the same electronic
format
• Less manual input of data required (0.5 hrs)
• Automatic updates if data changes
-> supports trigger review event monitoring
• Total time spent: ~550 hours
(down from 6,000 hours)
7Confidential – © KYC Exchange Net AG 2014
Client Bank
(a smaller bank that requires Cash Management services)
• Fills KYC Questionnaire online (16 hrs p.a.)
• Uploads all supporting documents (1 hr p.a.)
• Frequently updates questionnaire (6 hrs p.a.)
• Release of KYC Data on request: One minute
• Sending KYC data to any other business
partner: Two minutes
• Total time spent on 100 KYCs: ~25 hours
(down from 600-900 hours)
100 banks have a relationship
 100 banks process 99 client KYC’s
= 9.900 incoming KYC’s
 100 banks upload their KYC data
= 100 ‘outgoing’ KYC’s (down from 9.900)

8. Contact
Marcel Krist
Managing Director and CEO
marcel.krist@kyc-exchange.net
Zurich Office: +41 44 567 61 57
Hans-Joachim von Hänisch
Managing Director, Head of Product Development and Sales
joachim.vonhaenisch@kyc-exchange.net
UK Office: +44 1483 338 585
Headoffice
Hotelstrasse
(Postfach 311)
CH-8058 Zurich
www.kyc-exchange.net
info@kyc-echange.net
8Confidential – © KYC Exchange Net AG 2014

9. Confidentiality - Disclaimer
Document Confidentiality Statement
The information in this presentation and the conceptual approach to manage
a Standard Questionnaire via KYC Exchange Net AG as included in this
document is confidential to the person(s) to whom it is addressed and
should not be disclosed to any other person or party. It may not be
reproduced in whole, or in part, nor may any of the information contained
therein be disclosed without the prior consent of KYC Exchange Net AG. A
recipient may not solicit, directly or indirectly (whether through an agent or
otherwise) the participation of another institution or person without the
prior approval of KYC Exchange Net AG.
Any form of reproduction, dissemination, copying, disclosure, modification,
distribution and or publication of this material is strictly prohibited.
Confidential – © KYC Exchange Net AG 2014 9