KPMG boosts CDD, KYC and AML offering with SynerScope tooling

19 June 2019 3 min. read

KPMG has bolstered its financial crime services through a partnership with SynerScope, a firm that provides software that helps financial services institutions with uncovering criminal and fraudulent flows of money. 

The software of SynerScope focuses mainly on improving Customer Due Diligence (CDD) and Know Your Customer (KYC) processes – areas which in particular are a pain point for banks. Growing scrutiny by regulators on effectively tackling financial criminality has meant that the number and the complexity of regulations has increased sharply in recent years.

At the same time, large fines are being imposed for non-compliance, and more importantly those banks that fail to adhere are often slammed by media and politicians, causing significant reputational damage in the process. 

Dutch bank ING is one of the most recent cases illustrating this. The bank was hammered by the Dutch central bank for a lack of control of its so-called anti-money laundering (AML) processes, aimed at tracking money laundering. After an internal investigation, ING admitted that criminals had been able to launder money through its accounts and agreed to pay a fine of €775 million – the largest ever set by a prosecutor in the Netherlands – to settle the case.

“Strengthening Customer Due Diligence, Know Your Customer and Anti Money Laundering are an absolute priority for financial institutions,” explained Leonie de Hek, an advisor at KPMG in the Netherlands. One way in which this is materialising is in headcount. Large banks across Europe are rapidly expanding their financial crime teams in a bid to stay on top of workload and developments.KPMG boosts CDD, KYC and AML offering with SynerScope toolingHowever, with people alone banks won’t effectively be able to curb the risks, warns De Hek. “Tens of millions are being invested to improve processes, in particular by hiring more people. But just hiring additional people has insufficient effect given the nature of the problem.” The solution, she says, lies in a combination of people and technology.

This is how SynerScope came into the picture of the Big Four firm. Founded in 2011 as a spin-off of the Technical University of Eindhoven, the software company provides solutions (Ixiwa and Iximeer) that can analyse large volumes of structured and unstructured data. These analyses, for instance on financial flows of clients and accounts to/from accounts they hold, can provide key insights into patterns. Coupled with human thinking, this enables financial services institutions to extract valuable insights much quicker and more accurately than humans ever could have.

De Hek: “Many financial institutions struggle with the effective use of large amounts of (complex) data. The SynerScope platform makes it possible to achieve a higher return from data analysis and translate findings into the right actions.” Jan-Kees Buenen, chief executive of SynerScope, said his company's solution differentiates itself in the market through its ability to combine “all types and dimensions” of data.

For clients of the Big four firm, the KPMG - SynerScope partnership will lead to two main benefits. First, the consultants can provide them more value when professionalising their CDD, KYC and AML processes. Secondly, it will help them make their teams more efficient – and a more effective offering means that people previously allocated to manually tracking financial criminality can now be staffed on more value-adding activities. "For example on analysing transactions and customers with a higher risk profile,” said De Hek.

The partnership between KPMG and SynerScope is led by the firm’s Dutch firm. If the partnership turns out to be successful, then it is in the line of expectations that the scope will be extended to cover members firms in other countries (KPMG is active in 100+ countries).