Validatis x FinAPU: Valid data for optimizing business processes

FinAPU: Validatis is known for the timeliness and quality of its data sets. What do you think are the particular benefits of the data modules?

Salvatore Saporito: Individual requirements call for individual solutions. This is why our services are completely geared to our clients’ specific needs. We collect more than 1.3 million documents, announcements and publications from primary sources every year. Based on these, we compile special information packages in line with customer requirements - structured and ready for immediate use. This allows our partners to benefit from more than 15 years of experience in B2B market data and to boost the efficiency of their processes by relying on our high-quality data stock – generated from the public registers - which largely consists of these areas: annual financial statement publications (excluding filed balance sheets) ü, commercial register and insolvency notices, company notices from the Federal Gazette (liquidations), lists of shareholders, company profiles and much more. Our structural data can also be combined based on a variety of potential selection criteria, e.g. regional specifications, sectors (WZ08 code), company size according to the German Commercial Code (HGB) or also based on publication types (e.g. new entries, changes, deletions, etc.).

FinAPU: What does KYC mean and how can we explain it to our clients?

Salvatore Saporito: The Know Your Customer principle (KYC) is used to combat money laundering, terrorist financing and other white-collar crime. In the financial sector in particular, but also in other industries, a check according to the KYC principle is legally required to precisely identify customers and business partners. Know Your Customer is the common and manifest identification and verification of new and existing customers on the basis of money laundering requirements. A KYC check helps to identify bogus companies or to uncover funds from questionable sources. The core objective is to analyse whether the beneficial owners have other links or shareholdings with other companies and/or involve a risk. KYC is a standard and integral part of comprehensive due diligence in the compliance management process; regulatory frameworks are the most massive driver here, though not the only one.

FinAPU: How do you rate the relevance of reliable primary sources in the context of regulatory requirements? 

Salvatore Saporito: Valid and reliable sources are of key importance when it comes to obtaining information. The only way to build a secure KYC verification process, for example, is to have valid and verifiable data. This means the quality of the data used must be given high priority. Experience shows that the more primary sources are used (such as the commercial registers of the different countries) the higher the quality of the data. I’m also convinced that the aim should be to identify the right data sets in real time, not to accumulate broad and deep data sets. 

FinAPU: What trends and developments do you see in the coming years as far as taking decisive action against money laundering and terrorist financing is concerned? 

Salvatore Saporito: In my view, regulatory requirements will keep changing at a rapid pace and KYC requirements will become more and more complex. Regulatory guardrails and stimuli are increasing significantly. At the same time, digitalisation, which was accelerated once again by the Coronavirus pandemic, is playing an expanding role. It’s driving a further digitalisation push, which is both beneficial and necessary to automate manual process steps. All of the relevant peer groups are clearly focused on reducing the total amount of effort needed to prevent money laundering and terrorist financing and on optimising KYC processes.  Consequently, the development of suitable digital workflow tools or fully automated process optimisation is essential and is, in my view, the future in the KYC market. Knowledge exchange: I consider it stimulating for the market players and the industry environment to exchange information on this topic in the compliance/AML community, to influence and support the environment and the specifics of the KYC context, and to share our best as well as our bad practices.