However , it ’ s common for these operations to involve a series of enablers , with a potential chain of correspondent banks between originator and beneficiary . Each organisation must carry out its own diligence and make decisions according to its own attitude to risk . These decisions are based on the quality of the diligence data received .

A moment ’ s thought exposes weaknesses in this construct . The cost and delay of duplicated KYC operations are the most obvious , but there ’ s also a weakest link effect . The chain breaks if any one participant is working on outdated or inaccurate information . An individual may show as a PEP simply through having the same name or through an outdated media mention . False positives are more common than missed positives , and they frequently prevent or delay international payments .

Clarency , in common with most major payment companies , operates a high level of compliance , using leading providers such as ComplyAdvantage to carry out detailed diligence . That starts the payment chain strongly , but how can we ensure that everyone works from the same quality of information ? If full compliance data could be shared throughout the chain , not only would PEPs be more reliably identified , but significant cost and time savings could be made .

Banks communicate via the SWIFT messaging platform . Within SWIFT ’ s structure is the MT103 message , that provides 140 characters of payment information . While this can pass on basic instructions , it ’ s unable to contain the potential megabytes of compliance data that ’ s been gathered by or for the originator . SWIFT has responded with enhanced facilities , but adoption by banks has been slow . What ’ s needed is a method of sharing data within the constraints of existing technologies .

So how do we extend SWIFT ’ s data capacity without asking banks to change technology ? Clarency has solved the issue by creating a data vault – a discrete extension of its core BlockChain . All compliance data is stored here and can be accessed by any authorised institution via a 20-character key embedded in the MT103 message .

Privacy and security are handled by advanced access control , and the outcome is a unified , shared source of truth that improves PEP detection while facilitating international trade . �

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