Swift signed a memorandum of understanding with six banks to jointly develop and use Swift’s KYC Registry, a centralised utility for the collection and distribution of standard information required by banks as part of their due diligence processes. The Registry is expected to go live at the end of 2014 with a controlled ramp-up planned during the summer of 2014.

Bank of America Merrill Lynch, Citi, Commerzbank, JPMorgan, Societe Generale and Standard Chartered, will work together with Swift to build a service that will help banks manage their compliance challenges and reduce the high costs associated with implementing KYC-related regulations.

Luc Meurant, head of banking markets and compliance services, Swift said: “We welcome the close cooperation of these leading banks as we develop the KYC Registry. The banks’ involvement is an important step in this initiative to standardise the process and reduce the cost associated with KYC activities. The commitment from these banks demonstrates the importance of collaboration in financial crime compliance. Every Swift user will be able to benefit from our community-based solutions.”

Swift will operate the KYC Registry as an industry-wide utility with an initial focus on correspondent banking relationships. More banks are expected to join the initiative in the coming months.

The banks will participate in a Swift-led working group to agree the Registry’s processes as well as the documentation and information necessary to fulfil KYC requirements across multiple jurisdictions. In addition, the banks will start populating the registry with their own KYC data.

In the coming months, additional banks are expected to join the KYC Registry and contribute their own up-to-date information for secure, centralised storage. Each Registry user will have a standardised access point to obtain details on their counterparties, while retaining ownership of their own information and control over which institutions can view it.

“By providing a central, standardised utility solution replacing bilateral document exchanges between each set of counterparties, Swift is helping to reduce the cost, and risk associated with KYC compliance,” said Javier Pérez-Tasso, chief marketing officer, Swift. “It is encouraging to see the banks coming together around this initiative, which clearly demonstrates the value community-based solutions can bring to this challenge.”

The KYC Registry is the latest in Swift’s expanding portfolio of compliance solutions, which already includes Sanctions Screening and Sanctions Testing solutions, and will soon be complemented by a new compliance analytics service.