Know Your Customer (KYC) FrameworkRules-Driven KYC Compliance for Financial Institutions and Insurance Companies

Key Challenge

f Financial institutions (including retail, wholesale, private and investment banks, and securities and capital markets firms) and insurance companies are required to manage complex global KYC requirements that are geography-, customer- and product-specific.

f Increased time to onboard and transact with customers, due to manual KYC processes, has resulted in loss of opportunity (time to transact) and account abandonment.

f Manual KYC processes have resulted in noncompliance and long onboarding times, including repetition of documentation requests for existing customers.

f The lack of agility in changing risk ratings and KYC processes by product, geography and customer type has resulted in increased regulatory scrutiny and noncompliance.

f Global financial institutions and insurance companies find it difficult to manage processes to ensure compliance and manage onboarding time as regulations and risks change.

f Few institutions have automated, rules-driven KYC processes that are localized by product, geography and risk.

The SolutionPegasystems’ KYC Framework streamlines KYC processes and enforces organizational best practices to ensure compliance with global and regional requirements. Intent-driven user interfaces guide staff through required processing activities based on customer, product, geography and risk rating. Built on Build for Change™ technology, Pegasystems’ KYC Framework is easily modified and extended to support new business and regulatory requirement changes.

Improving compliance with complex global regulatory requirements and time to revenue while ensuring agility as risks and requirements changeIn a global compliance environment with increasingly complex product and organizational structures, financial institutions and insurance companies continue to struggle with identifying ways to manage the cost of compliance while significantly improving their internal controls and minimizing their time to transact with new and existing customers. The KYC compliance process becomes an operational challenge; it often delays the time to onboard and transact with new and existing customers, as back-office operations staff and sales officers try to ensure compliance with increasingly complex regulations. The complexity continues to increase as new products, geographies and risk profiles are added.

For more information, please contact your Pegasystems representative, visit us on the Web at www.pega.com, or email us at info@pega.com. © Copyright 2010 Pegasystems. All rights reserved.

2010-12

Know Your Customer (KYC) Framework

Key FeaturesCommon KYC Platform

f Enables prioritization and routing of due diligence activities between multiple users on one common platform with SLAs and escalation processes to ensure timely and accurate evaluation f Allows for specialization by country, line of business and product-specific KYC and Enhanced Due Diligence (EDD)compliance requirements f Enables reuse of existing due diligence and KYC documentation globally, displaying existing vs. required due diligence, ensuring consistency in due diligence while minimizing time to transact

Dynamic Risk-Rating Engine f Customizable rules automatically assign risk rating based on customer, product, geography and regulatory requirements f Intent-driven workflows drive required KYC and EDD activities (e.g., data collection processes) based on risk-rating drivers and customer profile f Automatically recalculates overall case and customer risk during the life cycle of the customer profile and drives additional KYC requirements f Configurable risk-rating tables allow for reclassification of variables and addition of new risk types by authorized business and technical users

Rules-Based Workflow f Rules-based process management automatically prioritizes and drives required KYC activities based on customer, product, geography and risk rating f Configurable KYC processes including risk evaluation, drivers for requirements by KYC type and entity data gathering f Supports specialized policies and procedures by region and product while enforcing common best practices across lines of business and geographies f Dynamic configuration of KYC business components (e.g., “Applies When,” “Required When,” ”Complete When”) allows policies and procedures to be easily reused and maintained

KYC Investigation Tools f Visual representation of corporate structures f Integration to Web services (e.g., Google Maps, due diligence tools)

Predefined Object and Data Models f Organizes KYC data into reusable and extensible case and folder structures that maintain all KYC information for an entity’s KYC profile f Supports creation of references to various KYC document requirements with integration to third-party content management systems f Easy integration with legacy client information and onboarding systems f Easily extended to “Know Your Employee” and “Know Your Broker” requirements

Management Reporting f Out-of-the-box reporting on key operational risk metrics, including timeliness, volumes and trending f Customizable management dashboards that support drill-down to case detail f Real-time reporting wizard to build custom reports

Real-time Audit Trail f Time-stamped audit history of manual and automated steps taken during evaluation, including related documentation f Audit trail of all system changes, including rules and workflow f History of KYC cases stored in profile for future reference and reporting

SLAs f Configurable service-level agreements ensure that processes are managed within regulatory and internal control time frames f Autogenerate and drive cases for re-evaluation of due diligence, documentation and high-risk customer review

Key Benefits f Ensure 100% processing completeness, accuracy, timelines, and compliance with global and regional regulatory requirements f Minimize onboarding time to improve customer satisfaction and reduce account abandonment f Automate enforcement of consistent KYC practices f Specialize policies and procedures for regional and product-specific requirements f Patented Build for Change® technology enables rapid deployment, modification and extension to manage changing risks and regulatory requirements