Today (3 March 2021) is day four of the House of Lords committee stage debate on the Financial Services Bill. I am proposing an amendment to highlight the current, sub-optimal, identity verification requirement in financial services known as Know Your Customer [KYC].
This amendment also offers a pathway to transforming our approach, our outcomes and our ability to effectively rely on that largest of TLAs [three-letter acronyms] in financial services.
The amendment in full:
Insert the following new Clause—
“Know Your Customer regulations review Within six months of the passing of this Act, the Secretary of State must commission a review of the current Know Your Customer regulations, with the aim of—
(a) enabling greater inclusion,
(b) enabling greater efficiency, and
(c) removing outdated measures.”Amendment 51, Lord Holmes of Richmond, Committee Stage Day 4, Financial Services Bill, House of Lords, 3 March 2021
I wanted to highlight all of the issues around inclusion in the manner in which KYC is currently constructed and undertaken. KYC excludes in so many ways – in short – it’s so papery.
Efficiency should be at the fore of any KYC system, currently it is not. We need a KYC system which is dynamic, in real time with details which we can instantly rely on.
Finally, we have a world leading financial services sector, not just in London, across the entire UK. We are leaders in Fintech, we lead in so many elements of fourth industrial revolution [4IR] technologies such as AI, DLT and cyber. Despite this leading edge financial services sector, KYC feels as if it is straight from the 15th century.
We need to include, we need to seek out the elements, in real time which can deliver KYC for individuals, for corporate entities. A KYC regime fit for 21st century UK individuals and business’. A KYC regime which is as leading edge as the sector it is so essential to.
Distributed digital ID is, obviously, more than a bit linked to this. I have an amendment down to this effect which is due for debate next week.
I hope the Government will support this amendment: it has security, social and economic benefits. It could form part of our ‘brilliant place to do business’ approach, demonstrating how standards are not drains on trade or economic growth but, if properly structured, they drive it, attract international investment and just make good sense.
Financial Services Bill Amendment: Introducing a Review of Financial Services Regulations.
Financial Services Bill Amendment: Adding a Financial Inclusion Objective to the Remit of the Financial Conduct Authority
Financial Services Bill Amendment: Duty to Report on Environmental, Social and Governance Status of Funds
Financial Services Bill Amendment: The Case for Regional Mutual Banks
Financial Services Bill Amendment: Lead Generators – Time for Regulation
Financial Services Bill Amendment: To Ensure Statutory Debt Repayment Plan (SDRP) Arrangements are Timely and Well Funded.
Financial Services Bill Amendment: Provision of Debt Advice
Financial Services Bill Amendments: Timetable and Funding for SDRP Arrangements
Financial Services Bill Amendment: Sale of Mortgage Loan Books
Financial Services Bill Amendment: Financial Policy Committee & Financial Exclusion
Financial Services Bill Amendment: Review on Cashback Without Purchase
Financial Services Bill Amendments: Ethical AI
Financial Services Bill Amendments: Fintech Strategic Review Recommendations
Financial Services Bill Amendments: Distributed Ledger Technologies
Financial Services Bill Amendments: Digital ID and Other Digital ‘Infrastructure’