Financial Services Institutions Are Struggling with Regulations and Compliance, Poll Shows

CAMBRIDGE, Mass. – February 28, 2012 – Despite stepped-up efforts, financial institutions and insurers are struggling to cope with the increased demands of new anti-money laundering and tax regulations, according to a recent survey by Pegasystems Inc. (NASDAQ: PEGA), the leader in Business Process Management (BPM) and software for customer centricity.  The survey found that several organizations are still far away from implementing Foreign Account Tax Compliance Act (FATCA) regulations, and many don’t have enough visibility into existing due diligence and Know Your Customer (KYC) processes for customers globally and across lines of business.

In fact, two-thirds of all respondents said they either have little or no visibility into these key compliance aivities.  Nearly half, or 44 percent, said they are still learning about FATCA versus actively implementing solutions to address the law, which shifts the onus of identifying U.S. account holders for tax reporting and compliance onto foreign financial institutions and other foreign entities and will take effect in early 2013. 

Global organizations face challenges ensuring compliance to new and existing KYC requirements that are country, risk, and line-of-business specific, while ensuring a 360-degree view of customer risk and minimizing the impact on sales and revenue growth. Organizations that adopt Pegasystems’ approach to KYC can enable seamless integration between sales, compliance and IT, ensuring auditability and control with faster on-boarding. Combining rules, process and case management technology from Pegasystems in a unified solution allows these organizations to bridge cross-silo KYC data because they can apply specialized rules, determined by the relevant product, geography, line of business, risk and channel.  Financial institutions that lack customer-centric KYC technology, including rules-driven KYC regulatory processes, run the risk of inconsistent compliance, slow on-boarding and diminished customer satisfaction.  Global institutions are not only implementing Pega’s agile KYC solution to automate and ensure compliance to current and complex KYC requirements, but also to meet new regulatory demands such as FATCA and suitability requirements. As risks and requirements change, institutions need to be able to implement changes quickly to ensure compliance and manage risk.

The survey was taken at a forum co-hosted with Celent that drew nearly 200 mid to senior-level executives from global financial institutions to address these industry issues and learn how the Pega KYC Solution can be used to ensure compliance and manage future regulatory changes.  Incorporating its patented Build for Change® technology, the Pega KYC solution ensures institutions can quickly deploy and easily extend to handle new regulatory requirements risks, and operations including suitability, full on-boarding and end-to-end sales.


Quotes & Commentary:

Neil Katkov, Senior Vice President, Celent

“The KYC area including customer due diligence and watch lists has become one of the biggest regulatory pain points today, especially for large institutions.  AML compliance is evolving and becoming more complex, not only due to regulatory demands, but also because of the techniques being devised by institutions to try to deal with that regulation.”

 Reetu Khosla, Director, Risk, Fraud and Compliance, Pegasystems

“More and more world-class global financial institutions and insurers continue to implement rules-driven KYC systems to manage complex, siloed and highly manual compliance processes that are hindering efficient on-boarding, time to revenue and customer experience.  New regulatory requirements, such as FATCA, are prompting these institutions to re-evaluate their KYC programs and technology to ensure compliance while minimizing the impact on the customer.  Many institutions are addressing the ever-growing regulatory demands head-on, choosing a unified platform to ensure a global 360-degree view of customer risk, ensure compliance to existing and emerging regulatory experience, while improving on-boarding times.”


Supporting Resources:


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About Pegasystems

Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at

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